A person may appropriate a part of his or her property for a particular purpose by placing it in a trust (see definitions).
There are two types of trust:
Obligation to file a trust income tax return As a general rule, a trust must file a trust income tax return for a taxation year for which it is obliged to pay income tax if it is considered to be resident in Québec or in Canada outside Québec. A trust is generally considered to be resident in Québec or in Canada outside Québec if the trustee (see definitions) resides in Québec or in Canada outside Québec. A trust that is resident in Québec on the last day of a taxation year must file a trust income tax return for that taxation year.
Even if the amount of income tax is nil, the trust must also file a return if it
Filing RL-16 slips In all cases, if the trust allocated capital gains or income to a beneficiary, the trust must prepare a trust return and also issue an RL-16 slip in the name of the beneficiary to report the amounts so allocated. However, if the amount allocated to the beneficiary is interest income in a single amount of less than $100, the trust is not required to issue an RL-16 slip.
The beneficiary must nevertheless be informed of the amount allocated, since the beneficiary is required to report all such amounts for income tax purposes, even if no RL-16 slip was issued.
Trust An entity that results from an act (an onerous or gratuitous contract, or a will) whereby a person transfers property from his or her patrimony to another patrimony that he or she constitutes; the property is appropriated for a particular purpose, and a trustee undertakes to hold and administer it. Testamentary trust A trust in which a person’s property is placed after the person’s death for the purpose of administering his or her succession (estate) or providing support payments. A testamentary trust can be established
Inter vivos trust Any trust other than a testamentary trust. In most cases, it is created by an authentic act drawn up by a notary. Trustee An individual or a trust institution that holds legal title to property on behalf of the beneficiaries of a trust. Upkeep expenses Expenses incurred by the person who holds title to immovable property for the maintenance and improvement of the property. Liquidator of a succession An individual or a financial institution designated (or appointed by a court) to administer or liquidate a succession (estate).
Clientele The following types of trusts must file a trust return:
Conditions Special conditions apply to the various types of trusts. For all information, contact Revenu Québec.
Note Certain trusts are exempted from the obligation to file a trust income tax return. For more information, refer to the Guide to Filing the Trust Income Tax Return (TP-646.G-V), published by Revenu Québec.
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