Running, Studying, and Cross-Border Estates: A Weekend in Motion

This past weekend was all about hitting the books—and the pavement.

With exam number three (out of four!) coming up in my pursuit of the TEP designation through STEP (Society of Trust and Estate Practitioners), I carved out some serious study time. But even study weekends need a break, and mine came in the form of a run with my 17-year-old daughter, Addison.

She sprinted ahead, earbuds in, likely vibing to Noah Kahan or another teenage favourite. I opted for a slower pace and tuned into something a little more niche: the podcast From the Source with Frankie and Sarah. No, they’re not indie musicians—you won’t find them on Spotify’s Top 100—but they are rockstars in the world of tax.

Their latest episode, “Non-resident beneficiaries? Here’s where estate taxes get complicated (EP. 32),” featured an insightful interview with Julianne McLaren. It dove deep into the complexities that arise when estates involve non-resident parties. A few key takeaways:

• Disposition to Non-residents: When assets are distributed to a non-resident of Canada, the estate may trigger a capital gain depending on the type of asset distributed.

• Certificate of Compliance requirements: Distributions of income and capital to non-residents can result in additional reporting, withholding tax, and clearance certificate requirements from the CRA.

• Withholding Tax Rates: Income paid to non-residents is generally subject to a 25% withholding tax—unless a tax treaty reduces it (e.g., 15% for U.S. portfolio dividends).

The episode was a great reminder that no two estate scenarios are the same, especially when cross-border elements are involved. As a lawyer focused on estate planning and administration, I regularly collaborate with tax experts to navigate these complexities.