Questions and answers about Form T1142
Are distributions from an offshore mutual fund considered to be received and reportable if they're either re-invested in the same trust or invested in a different mutual fund trust? Or should only distributions received in Canada be reported on Form T1142?
If the cost amount of the interest in the offshore mutual fund trust, together with any other specified foreign property, is more than $100,000, the investment in the trust must be reported by the Canadian resident on Form T1135, Foreign Income Verification Statement.
If Form T1135 is filed for the investment in the non-resident trust, filing Form T1142 is not required. However, if Form T1135 does not have to be filed, Form T1142 must still be filed if a distribution is received from the trust, regardless of whether the distribution is re-invested or paid out.
Does Form T1142, Information Return in Respect of Distributions From and Indebtedness to a Non-Resident Trust, have to be filed every year?
No. Form T1142 has to be filed only for years in which a person receives a distribution from or is indebted to the non-resident trust.
Is it possible to have to file both Form T1141 and Form T1142 for the same trust?
No. If you have to file Form T1141, T1134 or T1135 for the trust, you do not have to file Form T1142.
Is a person exempt from filing Form T1142, where a distribution is received from a non-resident trust, following the death of a parent?
If the non-resident trust was created on the death of an individual according to the terms of their will, then Form T1142 would not have to be filed by a person who receives a distribution from the trust (estate) in that year. However, once the estate has been administered, the Canadian beneficiary of the ongoing testamentary trust has to file Form T1142 in any year where a distribution is received from the trust.
If the non-resident trust was created before the death of the parent, then the non-resident trust is not an estate that arose on and as a consequence of the death of an individual. Therefore, a distribution from the non-resident trust following the death of the parent must be reported on Form T1142 filed by the person who received the distribution.
Forms and publications
- Form T1134, Information Return Relating to Controlled and Non-Controlled Foreign Affiliates
- Form T1135, Foreign Income Verification Statement
- Form T1141, Information Return in Respect of Contributions to Non-Resident Trusts, Arrangements or Entities
- Form T1142, Information Return in Respect of Distributions from and Indebtedness to a Non-Resident Trust
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