Originally published by Tax Notes. This article is the
first instalment in a four-part series that will appear in Tax
Notes over the next few months.
The purpose of this series of articles ("Series") is
to provide non-specialist advisors with a high-level overview of
some the tax traps1 that can impact non-resident trusts
("NRTs") with a focus on the recently expanded rules
relating to NRTs in section 94 of the Income Tax Act
(Canada) ("Act")2 ("Section 94 NRT
Rules"). Unfortunately, given the high level of complexity of
the rules that apply to NRTs and, in particular, the new Section 94
NRT Rules, achieving even this limited objective will not be
easy.
This first instalment of the Series will tackle issues
associated with the concept of "residency" in Canadian
tax law and how residency concepts have recently been expanded
under the Section 94 NRT Rules. Following the residency discussion,
a few real life examples of how the Section 94 NRT Rules could
impact a
