Canada’s Immigration Trust, As It Stands

A trust is exempt from Canadian income tax if neither contributor nor beneficiary were resident in Canada for more than five years. That is the rule. That is what newcomers to Canada need to know. Unfortunately, no such statement is to be found in Canada's Income Tax Act. Instead, this concept—known as the "immigration trust"—must be pieced together from a set of rules targeted at offshore trusts and which, together with the explanatory notes, span forty pages of fine print. Given this treatment of immigration trusts, it is little wonder that those who draft Canada's tax legislation have been unsuccessfully struggling with the more broadly applicable offshore trust rules since the 1990s.