CRA finds that a person can be a resident contributor based on deemed contributions made to a non-resident trust before 2007

CRA found that the post-2006 version of the s. 94 rules applied where a factually non-resident trust or its wholly owned subsidiary subscribed for shares of a resident corporation prior to 2007 with no election being made for an earlier application date. In this regard, CRA noted that the definition of "contributor" contemplated testing that status based on contributions made to a trust at any time before the testing time. Thus, the pre-2007 contribution would be by a “contributor” to the trust (unless an exempt person) - and such contributor, if also resident in Canada at the testing time, would generally be a "resident contributor" to the trust.

Furthermore, the deemed contribution rules in s. 94(2)(a) or (g), which reference their application “at any time” could also be triggered on the basis of deemed contributions occurring before the trust's 2007 taxation year.

CRA also confirmed that, by virtue of s. 4.3 of the Income Tax Conventions Interpretation Act, a trust which is deemed to be resident in Canada pursuant to s. 94(3) will be a resident of Canada and only of Canada for treaty purposes.

Neal Armstrong. Summaries of 24 March 2026 External T.I. 2025-1061181E5 under s. 94(1) - contributor and Income Tax Conventions Interpretation Act, s. 4.3.