On October 24, 2012, Canada’s Department of Finance (Finance) released a Notice of Ways and Means Motion (NWMM) that included the long-awaited “final” version of the proposed legislation for non-resident trusts (NRTs).
This Tax memo summarizes the main provisions of the proposed NRT legislation, referring to current relevant provisions of the Income Tax Act (Canada) as “old NRT rules” and those in the October 24, 2012 NWMM as “new NRT rules.”
An NRT generally will be deemed to be resident in Canada for a taxation year if, at the end of that taxation year, there is either:
A resident contributor is a person who:
Residency at the time of the contribution is not relevant.
A resident beneficiary must be:
but only if there is a “connected contributor” to the NRT.