Tag Archives: Fundy Settlement v Canada

Supreme Court of Canada Considers Trust Residence

The Canadian government taxes individuals, corporations and trusts on their worldwide income if they are considered to be resident in Canada. For individuals, factors such as nationality, physical presence, and social and economic ties, among others, are considered in determining residence. For corporations, residence is generally determined based on where the central management and control of the corporation is exercised.  For trusts, Canadian courts have long held that the residence of a trust for tax purposes was determined by the residence of the trustee who managed the trust or controlled the trust assets.  However, the recent decision of the Supreme Court of Canada in Fundy Settlement v. Canada (referred to in the lower courts as Garron) confirmed that trustee residence is not the appropriate test for determining the residence of a trust.

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