Immigration trusts allow new immigrants to Canada to protect their assets and legally avoid Canadian taxation of the income generated by such assets for an initial five (5) year period following their arrival. In certain circumstances, the use of offshore trusts can further protect such assets and income thereafter.
A person who moves to Canada with the intention of becoming a resident is subject to Canadian income taxation on worldwide income upon his or her arrival.
An "immigration trust" may be set up in order to take advantage of Canadian tax law provisions allowing a five-year tax holiday for the newly arrived immigrant.
An "immigration trust" is a trust created outside of Canada by an individual prior to, or within sixty (60) months, of becoming a Canadian resident, to which that person transfers income-producing assets. If properly structured, the revenue generated by the assets transferred to the trust is legally exempt from Canadian taxation until the immigrant contributor has resided in Canada for a period of up to sixty (60) months.
Our team can assist immigration applicants in the establishment of an immigration trust structure that complies with the various requirements of Canadian taxation law.
Our team, together with Canadian tax lawyers, offers an immigration trust structure that is simple, cost efficient and adapted to the needs of an immigrant to Canada. Our services include tax and legal resources, trusteeship in the appropriate tax haven, as well as fund management.
In addition to the possibility of deferral of Canadian taxation for five (5) years, other benefits of the establishment of a pre-immigration trust by a newly arrived immigrant to Canada include:
- Protection of assets from creditors
- Privacy and confidentiality with respect to personal and financial information;
- Access to global investment markets and investments that may not be available to Canadian-based accounts;
- Reduction of taxes and probate fees payable upon death (estate planning);
- Assets in trust are accessible worldwide with proper security clearance;
- Assets may be held in a variety of currencies of an investor's choosing;
- Increased diversification lowering overall portfolio risk.
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