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Extension for Certain Athlete Trusts

Extension for Certain Athlete Trusts

Finance proposes extension for certain amateur athlete trusts

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Finance is proposing to extend the expiration period for amateur athlete trusts by one year, from eight years to nine years, for trusts that would otherwise expire in 2019. As a result of Finance's proposal published on December 20, 2019, these trusts will expire in 2020 and any remaining trust property will be deemed to be distributed to the athlete (and included in their income) at the end of the 2020 taxation year.

In its release, Finance also says it plans to review the tax treatment of these trusts to ensure they continue to provide adequate financial flexibility.

Background

Currently, qualifying amateur athletes can benefit from a deferral of tax on certain income through the use of an amateur athlete trust. Amateur athlete trust amounts (contributions plus investment income) are included in income for tax purposes upon distribution to the athlete. Under the Act, amateur athlete trusts expire eight years after whichever is later:

  • The last year in which the athlete competed as a Canadian national team member, or
  • The year in which the trust was created.

If any property remains in the trust at the end of the eight-year period, it is deemed to have been distributed to the amateur athlete (and included in the athlete's income for tax purposes) at the end of that taxation year.

For more information, contact your KPMG advisor.

Information is current to January 7, 2020. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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