Supreme Court of Canada rules on trust residence - St. Michael Trust Corp. v. The Queen (Garron Family Trust)

Tax Controversy & Dispute Resolution ()

On April 12, 2012 the Supreme Court of Canada (SCC) released its decision in St. Michael Trust Corp. v. The Queen (sub nom. Garron). The SCC agreed with the reasoning in the lower courts that central management and control over the trust property, rather than the residence of the trustees, was the appropriate test for determining trust residence for purposes of the Income Tax Act (the Act).

The case is important because it clarifies the principles to be applied to determine trust residence and, as well, provides some comments with broader implications for determining corporate residence.