A trust is considered to be established in Canada, where there is one of the following months: for fiscal years that ended before February 11, 2014, persons who have been in Canada for a period of 60 months or less (or periods of total duration) have been exempted from treatment as resident or related contributors. This exemption also applies to non-resident trust tax years that end before 2015 if all the following conditions are met: an agreement or formal trust supporting document is generally developed by a lawyer and identifies the director, trust, agent and beneficiaries. Workers` health and social protection benefits are sometimes provided through a trust agreement under which directors receive employer contributions and, in some cases, by workers, in order to provide health and social protection benefits agreed between the employer and the workers. In order to receive HWT treatment, the trust`s funds cannot be returned to the employer or used for any purpose other than the provision of health and social security benefits for which contributions are made. In addition, the employer`s contributions to the fund must not exceed the amounts required to make these benefits available. To consider treatment as HWT, employer payments cannot be made on a voluntary or free basis – they must be enforceable by administrators if the employer decides not to make the necessary payments. This regime is limited to one or any combination of the following: although each of these cases has confirmed informal “trust” accounts, they highlight the need for formal documentation of trust and show how difficult it is to demonstrate a clear intention to create a trust without formal agreement. A master position of trust is exempt from Part I tax. A trust can opt for master trust by chartering it in a letter filed with its T3 return for the fiscal year chosen by the Trust to become a Master Trust. Once made, this choice cannot be revoked. However, the position of trust must continue to meet the conditions listed above in order to maintain its identity as a trusted master. Once the first T3 return for the Master Confidence Position has been filed, you don`t need to submit any further T3 returns for this trusted position.
If a future T3 return is filed, we assume that the Treuhand no longer meets the above conditions. The position of trust is not considered a master confidence and must submit annual T3 returns from that date. If trust is broken, send us a letter to let us know the date of the settlement. The second case, Blum v. the Queen, was decided in September 1998 by the Canadian Tax Court if the profits and income of shares acquired by a grandfather with confidence for his grandchildren were to be charged to him. Mr. Blum sold a few units in 1987 and 1988. Although the shares were issued in his name “in confidence” for his grandchildren, the rating agency included Mr. Blum`s capital gains and shares for the two years in question.
Mr. Blum appealed to the Canadian Tax Tribunal and argued that, although the funds do not interfere with the trust`s official documents, the funds were not used personally by him, but held the shares and proceeds of the sale for the fiduciary grandchildren.