Cross-Border Trusts

This in-depth module explores the complex intersection of trust and estate planning across Canadian and international borders, with particular emphasis on U.S. tax exposure. CPA professionals will learn how trust residency is determined under Canadian law, the implications of deemed residency under section 94 of the Income Tax Act, and how to navigate dual-residency conflicts involving Canada and the U.S. The module addresses the critical differences in how death is taxed—capital gains at death in Canada versus the estate tax regime in the United States—and examines the implications for Canadians owning U.S. situs property or with U.S.-resident heirs. Through analysis of U.S. estate tax exemptions, Canadian attribution rules (including s. 75(2)), and the treatment of grantor vs. non-grantor trusts, learners will be equipped to identify tax risks and opportunities when working with foreign or domestic trusts that have cross-border elements. Reporting obligations under CRA Forms T1141 and T1142, as well as IRS Forms 3520 and 3520-A, are examined in detail. The module also covers advanced planning tools such as testamentary trusts, Qualified Domestic Trusts (QDOTs), and the strategic use of discretionary trust structures to mitigate double taxation. With practical case studies and FATCA/CRS compliance integration, this module empowers CPAs to manage the evolving complexities of cross-border wealth transfer and trust structuring.