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ARTICLE · 16 JUNE 2014

Elimination Of Graduated Rates For Testamentary Trusts

Miller Thomson
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The 2014 Budget proposes to introduce a number of significant changes to the taxation of trusts and estates.

CanadaTax
Gail Black
Gail Black
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The 2014 Budget proposes to introduce a number of significant changes to the taxation of trusts and estates which will fundamentally change the landscape of estate planning. The Department of Finance (the "Department") proposed these changes to eliminate the preferential treatment of testamentary trusts over certain inter vivos trusts, citing concerns about tax fairness and neutrality.

A trust is a legal arrangement under which one person (the trustee) holds property for the benefit of another person (the beneficiary). There are two categories of testamentary trusts. The first is a trust created under the terms of a will and the second is an estate which arises on the death of an individual and involves a legal representative administering the final affairs and property of the individual. Trusts and estates are considered individual taxpayers under the Income Tax Act (Canada) (the "Tax Act") and are taxable on any income earned by the trust and estate and not paid or

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