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More Trusts Now Required to File Quebec Returns 

Canadian Tax Adviser

 

February 19, 2013

 

Certain trusts, regardless of residency, may now have to file a Quebec income tax return according to a Quebec announcement. In addition, certain trusts resident in Canada outside Quebec that own a specified immovable are now required to file an information return. These amendments apply for tax years beginning after November 20, 2012.

Legislative background
In the Quebec provincial budget for 2013-2014, the Quebec government said it would step up its efforts to fight tax evasion by implementing several initiatives including the creation of new filing obligations for certain trusts.

 

Income tax return filing for trusts
Quebec says it will amend the tax legislation so that a trust (other than an excluded trust; for example a testamentary trust, mutual find trust and specified investment flow-through) subject to Quebec income tax must file an income tax return for a taxation year if it meets one of the following conditions:

 

  • In calculating its income for the taxation year, the trust deducts an amount allocated to a beneficiary, regardless of the beneficiary's place of residence
  • The trust is resident in Quebec on the last day of the taxation year and owns at some time in that taxation year property the total of whose cost amounts exceeds $250,000
  • The trust is not resident in Quebec on the last day of the taxation year and owns, at some time in that taxation year, property that was used in carrying on a business in Quebec the total of whose cost amounts exceeds $250,000.

 

Addition of an obligation on a trust to file an information return
Quebec says that it will amend the tax legislation so that an information return must be filed by a trust (other than an excluded trust) that is resident in Canada outside Quebec and that owns a specified immovable (or is a member of a partnership that owns a specified immovable) at some time in a taxation year. Quebec defines "specified immovable" as an immovable, including a right in the immovable, that is located in Quebec and that is used mainly to earn gross revenue that constitutes rent.

 

For more information, contact your KPMG adviser.

 

 

 

 

 

 

Information is current to February 19, 2013. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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