This paper will discuss a limited selection of Canadian income
tax issues arising in estate administration1 as
follows.
- Testamentary trust status
- Distribution to a non-resident
beneficiary – section 116 compliance
- Reassessment issues – timing
and who can be assessed
It is assumed that the estate is a resident of Canada for income
tax purposes, i.e., applying the common law test of residence,
2 central management and control of the estate is in
Canada.
I. Testamentary Trust Status
A critical requirement for graduated rate estate3
status is that the estate must be a testamentary trust as defined
in subsection 108(1). A trust that is provided for in the Will of
the deceased is not automatically a testamentary trust and a trust
that is initially a testamentary trust may later cease to meet the
statutory definition and therefore cease to be a testamentary
trust. Loss of testamentary trust status at any time in the 36
months following the death of the
