Immigration Trust - When the 5 Years start?

[alan888]

Regarding the five year period of immigration trust. When does it start? In the year of the landing date or in the first tax residency year?
For example, let's say I do the landing in 2010, after a few weeks I leave canada, and come back in 2012. Can I use the trust until 2015 or until 2017?

 

[toby]

The trust period begins tha day you become a resident (hence taxable in Canada). That is, the day of landing.

 

[alan888]

Thanks. That is probably how it works in the general case. However, I did some checks and I think that if I move to a country with which Canada has a tax treaty - that period should be excluded.

I think that the immigration trust is defined in the Income Tax Amendments Act, 2006, Subsection 75(3). The 60 months limit is defined by "... been resident in Canada for a period of, or for periods the total of which is, not more than 60 months...".

Now, section 24 of the INCOME TAX ACT, "Determination of an Individual’s Residence Status" documentation says: "An individual who is otherwise resident in Canada for purposes of the Act, and who, at a given time, is resident in another country for purposes of a tax treaty between Canada and that country, is deemed not to be resident in Canada at that time, ... The individual is treated as a non-resident for all purposes of the Act..."

Therefore, if in 2010 and 2011 I am a resident of another country according the tax treaty - that period should be excluded from the 60 months.

Am I right? If not - What have I missed?

 

[toby]

You seem to be correct, but I am concerned by the wording: "is resident in another country for purposes of a tax treaty between Canada and that country". What does "for purposes of a tax treaty" mean? For your interpretation to be absolutely correct, the Act would have to read something like: "is resident in another country with which Canada has a tax treaty ...."

I'd read not only the Act, but attendant Bulletins of CRA for corroboration or clarification.

Please, let us know what you find, just in case grannie gives us a lot of money and we suddenly need an Immigrant Trust. ;D