Designated Beneficiary
Articles
Audrey Gibeault, "Unexpected Application of Part XII.2 Tax to a Canadian Personal Trust", Canadian Tax Focus, Vol. 3, No. 2, May 2013, p. 10, at 11.
Planning opportunities to deal with the emigration of a beneficiary and the resulting application of Part XII.2 tax to a trust appear to be quite limited. In some non-arm's-length situations, the non-resident might agree to be removed as a beneficiary. Alternatively, the non-resident could avoid receiving any income or capital from the trust for any given fiscal year in the hope that he or she would not be classed as a beneficiary and thus would not trigger the application of the tax to the trust for that year. The basis of this argument is that the Act does not define the term "beneficiary" for the purposes of Part XII.2.