Dual-Resident Estate

For Canadian tax purposes, an estate is now deemed to be a trust under a 2013 amendment to the subsection 248(1) definition of a trust. My article on Hess (see "Trust or Estate?" Canadian Tax Highlights, April 2012) is no longer relevant. Thus, a distribution from a foreign estate must be reported on form T1142, "Information Return in Respect of Distributions from and Indebtedness to a Non-Resident Trust," where a testamentary trust arises out of an estate. This deeming provision may create complications for a trust that is deemed to be a Canadian resident under subsection 94(3). An argument can be made pursuant to subsection 233.6(1) that an estate is not subject to T1142 filing because the language of subsection 233.6(1) excludes an estate that arose as a consequence of the death of an individual.