Tag Archive for TCP

How Canada Taxes Real Estate Gains of Non-Residents

Like many countries. Canada taxes non-residents who realize gains on real estate located within its borders(1).

This will be true whether the real estate is capital property that is held for the purposes of earning from rental or a business; capital property held for personal use; or inventory of a business (e.g. where it is held for resale).

This article will focus on situations where the real estate is capital property.

The Income Tax Act (“the Act”) provides that non-residents are subject to tax in Canada on taxable gains from the “disposition” (which can include sales, as well as other events deemed to be dispositions, such as death) of “taxable Canadian property” (“TCP”)(2). TCP Read More

Written by | Posted in Capital Gains • International • Real Estate

Distributions From Canadian Trusts Or Estates To Foreign Beneficiaries Can Entail Tax Notification And Clearance Requirements

In certain cases, a distribution of capital by a trust(1) to a non-resident beneficiary will bring into play certain notification and tax clearance requirements found in subsection 116.

As a general rule, a distribution of capital by a trust to a beneficiary is considered a “disposition” by that beneficiary of all or a portion of that beneficiary’s capital interest in the trust(2).

If the interest of the beneficiary is “taxable Canadian property” (“TCP”), the beneficiary will be required to send a notification of such disposition to the Canada Revenue Agency (“CRA”) within 10 days after the disposition(3). In addition, the CRA takes the position that the trust itself can be liable for tax, in such circumstances, if a tax clearance is not Read More

Written by | Posted in Estate Planning Tax • Income Tax • Individual