Proposed Changes to the Taxation of Testamentary Trusts

379 views

Published on

Presentation to the Estate Planning Council of Abbotsford on October 16, 2013 by David Christian, a Tax Lawyer with Thorsteinssons LLP Vancouver.

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
379
On SlideShare
0
From Embeds
0
Number of Embeds
25
Actions
Shares
0
Downloads
4
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Proposed Changes to the Taxation of Testamentary Trusts

  1. 1. PROPOSED CHANGES TO THE TAXATION OF TESTAMENTARY TRUSTS THORSTEINSSONS LLP TAX LAWYERS
  2. 2. CHANGES TO TESTAMENTARY TRUSTS: BACKGROUND  June 3, 2013 Consultation Paper released by Department of Finance  Basic thrust – treat estates and testamentary trusts like inter vivos trusts after three years  Submissions requested  Deadline for submissions is December 2, 2013  “A consultation is not a poll. Please do not send multiple or duplicate submissions.” THORSTEINSSONS LLP T
  3. 3. CHANGES TO TESTAMENTARY TRUSTS: BACKGROUND  Testamentary and Grandfathered Inter Vivos Trusts    Graduated Rates Changes in Tax Rates 1972 - 2013 Why does the government want to do this? The estates of most deceased Canadians are finalized and administered in a timely fashion and without inappropriate tax planning. However, some taxpayers are using estates and trusts to obtain unintended tax advantages. Eliminating the tax benefits of graduated rate taxation for trusts and certain estates would ensure increased fairness and neutrality in the federal income tax system. The proposed measures would also address the potential growth in tax planning involving existing rules and the associated impact on the tax base. THORSTEINSSONS LLP T
  4. 4. CHANGES TO TESTAMENTARY TRUSTS  What are the changes?  Three Year Period  Disabled Beneficiaries  Certain Trusts for Minors  Spousal Trusts THORSTEINSSONS LLP T
  5. 5. RELATED RULES  Installments  Alternative Minimum Tax  Taxation Year  Part XII.2 Tax  Personal Trust Status  Investment Tax Credits THORSTEINSSONS LLP T
  6. 6. CHANGES TO TESTAMENTARY TRUSTS: TAX ADMINISTRATION RULES  Rules that extend the period:  during which the Canada Revenue Agency (CRA) may refund an overpayment of tax,  for objecting to a tax assessment,  for filing an agreement to transfer forgiven amounts under the debt forgiveness rules, and  during which, at the trust’s request, the CRA may reassess or make determinations in respect of certain income tax liabilities. THORSTEINSSONS LLP T
  7. 7. THE FUTURE  What happens to existing estates?  What is the process for change in the law?  When is this proposed to occur?  How does planning change? THORSTEINSSONS LLP T

×