Religious Organization (Other Than a Charity)

A congregation is a group of individuals who are part of a religious organization. A trust is deemed to have been created and to hold the property of a congregation if the following conditions are met:

  • All the members of the congregation live and work together, do not have the right to own property in their own name, and devote their working lives to the activities of the congregation.
  • The congregation carries on one or more businesses, or manages or controls businesses through a business agency (such as a corporation or a trust), for the purpose of supporting its members or the members of any other congregation.

The trust must calculate its income tax and comply with the requirements regarding the obligation to file an income tax return. Each year, however, the trust may elect, under federal legislation, to allocate all of its taxable income to its beneficiaries (the members of the congregation).

For the purposes of Québec legislation, no such election may be made unless it is made under federal legislation, in which case it is automatically deemed to be made, provided the income tax, interest and penalties payable by the trust's beneficiaries for previous years are paid within the time limit required under the Taxation Act. Therefore, if the trust makes this election with the Canada Revenue Agency, you must send us proof that the election was made and written notification no later than the filing deadline for the return or 30 days after the election was made (whichever is later).

If the trust earned business income in the year and a portion of the income is payable to a member of the congregation, the income is considered to be derived from a business operated by the member.

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