Canada: Trusts

Canadian income tax law does not prohibit Canadian residents from using offshore entities or structures. What it does prohibit—explicitly and deliberately—is the deferral of Canadian tax on passive or investment income through foreign intermediaries.

The Canadian federal government has introduced Bill C-31, which proposes significant changes to the qualified investment rules for registered plans.

The Ontario Superior Court of Justice examined whether a woman with diminished capacity required a court-appointed guardian to manage her substantial property holdings, or if less restrictive alternatives could protect her interests while preserving her autonomy. The case centered on balancing the state's duty to protect vulnerable persons against an individual's fundamental right to self-determination when making decisions about tens of millions of dollars in assets.

A trust is a legal relationship that is created where property is entrusted to a person to hold or manage the property for the benefit of another.

Between January 1, 2024 and December 31, 2026, business owners can access significant tax benefits when selling a qualifying business to an employee ownership trust ("EOT") pursuant to a transaction that constitutes a qualifying business transfer. Among other benefits, eligible vendors are entitled to receive a shared pool of up to $10 million in capital gains deductions (the "EOT Deduction").

In 2025, Prince Edward Island introduced a sweeping modernization of its trust legislation through Bill No. 5 –Trustee Act, replacing the longstanding Trustee Act (Chapter T-8).

Engaging in effective tax planning with the professionals at Bateman MacKay is often a multi-year endeavour.

As discussed in our prior article on Employee Ownership Trusts, Canadian business owners report that finding a buyer is a significant obstacle to succession planning.

On October 29, 2024, the Canada Revenue Agency (CRA) issued a release stating that it will not require bare trusts to file trust returns for the 2024 tax year...