The government has belatedly made tougher rules for private trust funds that have been criticized as providing generations of wealthy Canadians plenty of loopholes to evade taxes.
The revelation of an offshore trust fund worth $60 million (U.S.) linked to two generations of Liberal Party fundraisers in the Paradise Papers leak prompted the government into this action. The new rules in the 2018 budget forces the people behind trust funds, those contributing or receiving payments as well as the lawyers and accountants to identify themselves in tax filings.
Tough penalties will force those who don’t file to consider the consequences of staying in the shadows. Those who fail to file a tax return for their trust will face fines equalling 5 per cent of its total value.
Trusts only must reveal they exist when they voluntarily file a tax return to the Canada Revenue Agency. Many of them do, but it’s a system that relies on people to self-report. – CINEWS