The Ontario provincial court issued a blow to interprovincial tax planning using trusts in the recently released decision The Herman Grad 2000 Family Trust v. The Minister of Revenue, (“Grad Trust”). The Grad Trust case is a recent addition to two similar cases released in 2015, the decisions Discovery Trust v. Canada (National Revenue) and Boettger, es qualites de fiduciaire du Nancy Smith c. L’agence du revenue du Quebec. All three cases presented the same issue: is the trust a resident of Alberta or another province? In the latest edition of CALU Report, Megan Seto will discuss the results to date from the provincial courts and explain how the finding in Grad Trust is unlikely to end the uncertainty for tax planners. She will also explain how advisors can carefully review decision-making procedures and trust documentation to confirm that central management and control of the trust is in fact exercised in the provincial jurisdiction of choice.
The topics covered in this report include:
- Prior Jurisprudence
- Discovery Trust
- Nancy Smith Trust
- The Grad Trust