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Canada: Principal residence exemption for trusts, recommended expansion

Canada: Principal residence exemption for trusts

The Department of Finance has recommended allowing broader access to the principal residence exemption for certain trusts.


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In a recent comfort letter, Finance states it will recommend amending the income tax law to allow certain inter vivos trusts to be eligible to claim the principal residence exemption. Specifically, this change would accommodate inter vivos trusts with a beneficiary who is a Canadian-resident individual eligible for the disability tax credit. Finance recommends the amendment be applied to tax years beginning after 2016.

Read a December 2019 report prepared by the KPMG member firm in Canada

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