Notwithstanding the special treatment for immigration trusts, it is still possible that the immigrant will be subject to taxation in Canada on trust income that has not been distributed to beneficiaries in Canada. The rules are extremely complex and beyond the scope of this paper. Needless to say, extreme care must be taken in the creation of the immigrant trust structure to avoid taxation. It is not uncommon for the structure to involve loans, redeemable shares and several trusts and corporations. Other beneficiaries may include adult children, and, provided there are prescribed restrictions on when funds can be distributed, minor children and the spouse.
Care is taken to ensure that the corporation never becomes a resident of Canada.
Income accumulated in the corporation is only transferred to the trust after it has migrated to Canada and other steps have been taken to ensure that this can be done on a tax-free basis. This article deals with complex issues in a brief manner, it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained herein. Although every reasonable effort has been made to insure the accuracy of the information contained in this publication, no individual or organization involved in either the preparation or distribution of this publication accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use. This article deals with complex issues in a brief manner, it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained herein. Although every reasonable effort has been made to insure the accuracy of the information contained in this publication, no individual or organization involved in either the preparation or distribution of this publication accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.