Non-resident individuals very well may be subject to AMT on their gains, in excess of the s. 116 withholding

Where a family member with high taxable income has lent money to a trust at the prescribed rate provided in Reg. 4301(c), under s. 127.52(1)(j) only 50% of this interest is deductible in computing the trust’s adjusted taxable income (ATI). The s. 104(6) deduction is only available for distributions of income computed under the ordinary rules and does not permit the distribution of the additional ATI.

A possible solution is for the trust to forgo claiming deductions under s. 20 and distribute the resulting increased income to its beneficiaries (provided they are both capital and income beneficiaries).

AMT applies to all individuals, with no exemptions for non-residents, so that a non-resident selling taxable Canadian property (TCP) often will be subject to AMT on the resulting capital gain (equaling 100% of the gain). Although the purchaser of the TCP may have withheld under s. 116, the non-resident nonetheless is required to file a Canadian tax return to report the capital gain, so that the application of AMT may give rise to a balance owing upon such T1 filing.

Neal Armstrong. Summaries of David Carolin, Nadia Rusak and Manu Kakkar, "AMT: Alternative Minimum Tax Should Be Renamed Additional Massive Tax," Tax for the Owner-Manager, Vol. 25, No. 3, July 2025, p. 8 under s. 127.52(1)(j) and s. 127.52(1)(d).