The Supreme Court of Canada granted leave to appeal in St. Michael Trust Corp., as Trustee of the Fundy Settlement v. Her Majesty the Queen this morning, a case in which the Tax Court of Canada and the Federal Court of Appeal applied the test of where the central management and control of a trust was exercised in determining whether a trust was resident in Canada or in another jursidiction for the purpose of applying the provisions of the Income Tax Act, Canada. In this case, the trustee of two trusts was a trust company incorporated in Barbados, and the trustee argued that the trusts were exempt from capital gains tax in Canada on the sale of certain assets persuant to a tax treaty between Canada and Barbados. But the Tax Court of Canada held that because the central management and control of the trusts were really exercised in Canada, the trusts were resident in Canada, rather than in Barbados. The Federal Court of Appeal upheld that aspect of the decision.
The Supreme Court of Canada will now have the opportunity to determine the test for residency of a trust under Canadian income tax law.
I wrote about the Tax Court of Canada decision here. You can read the Federal Court of Appeal decision here.
I found out about this leave to appeal from Eugene Meehan Q.C.'s SCCLawLetter which provides very timely information about Supreme Court of Canada decisions.