• Barbados Trust Cannot Sidestep Normal Tax Appeal Process
  • March 24, 2010 | Author: Stephanie A. Wong
  • Law Firm: Borden Ladner Gervais LLP - Toronto Office
  • In Canada (National Revenue) v. Morris, the Minister of National Revenue appealed a Federal Court judgment requiring it to provide the RCI Trust, a Barbados settled trust, with a written decision on whether shares sold by the trust in 2006 were treaty exempt property under the Canada-Barbados Income Tax Convention. The RCI Trust obtained the judgment on an application for judicial review of the Minister’s refusal to provide administrative relief and issue a compliance certificate under section 116 of the Income Tax Act (Canada). Section 116 imposes reporting and withholding obligations on non-residents’ dispositions of certain taxable Canadian property. Under the Minister’s published administrative policy, relief would generally be provided where a non-resident claimed a treaty exemption and provided specified documentation. The RCI Trust maintained that it had satisfied the conditions of the administrative policy and the Federal Court agreed with this position in its judgment.