The Department of Finance has proposed an extension to the expiration period for amateur athlete trusts by one year (from eight years to nine years) for trusts that would have otherwise expired in 2019.
As a result of the proposal, these trusts would expire in 2020 and any remaining trust property would be deemed to be distributed to the athlete (and included in the individual’s income) at the end of the 2020 tax year.
Finance also plans to review the tax treatment of these trusts to determine that they continue to provide adequate financial flexibility.
Currently, qualifying amateur athletes can benefit from a deferral of tax on certain income through the use of an amateur athlete trust. The amounts in an amateur athlete trust (that is, contributions plus investment income) are included in income for tax purposes upon distribution to the athlete. Under current law, amateur athlete trusts expire eight years after the last year in which the athlete competed as a Canadian national team member or the year in which the trust was created, whichever is later.
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 tax year.
Read a January 2020 report prepared by the KPMG member firm in Canada
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