Steven Frye

Many estate plans include a transfer of property (e.g. shares of a privately held corporation) to a company and freeze the value (or price) of the transferred property to the current owners at the transfer date. To avoid some punitive provisions in the Income Tax Act associated with non-arm’s length transfers, transfer agreements often include a price adjustment clause (“PAC”) which provides for a retroactive adjustment to the transfer value….

Recently the Canada Revenue Agency (“CRA”) was asked whether income allocated by a communal organization and reported as self employment earnings for CPP eligibility on a trust income tax slip (T3 slip) is considered “working” income for the recipient to claim the Working Income Tax Benefit (“WITB”). CRA responded that the Income Tax Act generally defines income from a Trust to be income from a property and not any other….

A blind trust is a trust in which a settlor (who would also be the contingent beneficiary) reserves the right to terminate the trust but agrees to relinquish all other control over the trust i.e. administered and managed by others without updates, advice, instruction, or account to the settlor. Whether they are legislated to do so or not, individuals who hold public office use a blind trust for the duration….

The Income Tax Act (“ITA”) requires persons and partnerships to file information returns in respect of foreign property ownership and transactions with non-residents. This extends to trusts and estates. Those who file such a return late or do not file one on demand are liable to a penalty or penalties. Generally speaking, a penalty starts at a minimum of $100 to a maximum of $2,500, if over 100 days late…..