Many new entrants to Canada–such as managers, transferred workers for multinational firms, and/or permanent residents–time and again make use of the alleged immigration trusts to organize their tax matters. Usually, the proceeds of an immigration trust, set-up for the benefit of a fresh migrant to the Maple Country (Canada), could be free from taxes in the country, for a maximum period of 5 years.
As such, a trust for immigration is a powerful and useful tax-planning instrument which enables fresh migrants, together with the members of their families, to draw benefits for a maximum period of 5 years from the earnings generated inside the home nation, though they do not have to pay any taxes whatsoever.
Even post the expiry of the 5-year exemption period– and in the wake of the immigration trust becoming subject to tax inside the nation–it (the immigration trust) could continue to act as an asset protection trust for the assistance of those world families who could be living inside & outside the territorial jurisdictions of the Maple Country.
Still, with a view to successfully make the cut for the relief, the trust must be appropriately put into practice & maintained. Much specifically, the unit, brought into existence to act as an immigration trust must cater to the description of a trust for the tax objects.
You own immigration asset trust in the Maple Country?
Those who own an immigration asset trust, established as a private institution, across any of the nations of Europe–such as Luxembourg or Austria–could now be required to duly modify their pre-immigration tax arrangements.
Sometime back, the concerned court observed that a private institution may not meet the criteria for the tax purposes. The court in question reportedly dealt with an Austrian private organization, set-up by an Austrian resident for the assistance of his son, who was a Canadian resident.
In case a specific private organization acting as a trust for immigration, for a fresh Canadian migrant, no longer meets the conditions, as a trust for the tax objects, the 5-year exemption from excise won’t be applicable. In the backdrop of the imminent ambiguity involving the legal characterization of the private organizations, the new entrants to the country would do well to organize an immigration trust with common law controls. Besides, an existing private institution acting as an immigration trust for new entrants to the nation or its assets, could be re-organized or be shifted to a common law control.
In a situation wherein one’s immigration or asset protection trust was set-up as a private organization, across Caribbean or Europe–even as the said trust involves a resident of Canada in any manner—the future of not only the resident & but also the institution could be in jeopardy.
