Trust not Resident in Canada

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A trust that was not resident in Canada at any time in a taxation year is subject to Québec income tax if, at some time in the taxation year, one of the following conditions is met:

  • The trust carried on a business in Québec.
  • The trust disposed of taxable Québec property.
  • The trust realized a taxable capital gain on taxable Québec property (by including in its income a provision deducted from a capital gain in the previous year).
  • The trust was a specified trust that owned a specified immovable or that was a member of a partnership that owned such an immovable.
  • The trust owned property that it used in carrying on a business in Québec, and the total of the cost amounts of its property exceeded $250,000.

Such a trust must file an income tax return even if it has no income tax payable for the year. However, a trust that carried on a business in Québec (and that does not meet any of the other conditions above) will not be required to file an income tax return if it has no income tax payable for a year, unless it has no income tax payable solely because it carried forward a loss sustained in a previous year.

Note

A non-resident trust may be deemed to be a resident trust, and may therefore be required to file an income tax return

Specified immovable held by a non-resident trust

An inter vivos trust that is not tax-exempt and that is not resident in Canada at any time in the year (called a “specified trust”) must pay income tax at a rate of 4.47% on the net income derived from the rental of a specified immovable (including the trust's share of such income from a partnership of which the trust is a member, if applicable). For more information, see Specified Trust and section 5.6 of the Guide to Filing the Trust Income Tax Return (TP-646.G-V).

If such a trust becomes resident in Canada at some time in the year, any specified immovable that it owned at that time is deemed to have been disposed of immediately before it became resident in Canada for proceeds equal to the fair market value (FMV) of the immovable at that time. For more information, see section 5.1.2.2 of the Guide to Filing the Trust Income Tax Return (TP-646.G-V).

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