ARCHIVED – Budget 2013 - Graduated Rate Taxation of Trusts and Estates

Archived content

Information identified as archived is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please contact us to request a format other than those available.

What types of trusts are subject to the graduated rates of tax applicable to individuals?

Currently, testamentary trusts (including certain estates and trusts created by will), as well as certain inter vivos trusts established before June 18, 1971 (grandfathered inter vivos trusts), calculate federal income tax using the same graduated tax rates applicable to individuals. Other trusts pay federal tax at the highest income tax rate for individuals (29% for 2013).

What is being proposed related to the tax rates for these trusts?

The budget announces the future release of a public consultation paper on potential measures to eliminate the tax benefits that arise from the taxation certain trusts and estates at graduated rates.

Where can I get more information related to the consultation process?

Please refer to the Department of Finance Canada's web site for further updates concerning this consultation process.

Date modified: