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ARTICLE · 11 FEBRUARY 2014

In FATCA-Land, A Canadian Trust Is A Bank

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When Alice found herself in Wonderland, she observed a recognizable world that had been turned on its side.

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When Alice found herself in Wonderland, she observed a recognizable world that had been turned on its side. So too do we find ourselves in FATCA-Land; logic and proportion, while recognizable, are unfamiliar. In Wonderland clocks ran backward and animals could talk; in FATCA-Land virtually all Canadian private trust or estates are treated as banks.1

The Foreign Account Tax Compliance Act (FATCA) legislation is stunning in its ambition, reach and complexity, and as a result, this article will discuss only a few of the most important issues that arise under the Intergovernmental Agreement (or "IGA") recently executed by Canada and the US. These issues include: classification of trusts, the issues with TFSAs, RRSPs, etc., and an identification of potential problems with Canada's draft legislative proposal.

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