KUVASZ TAX & FAMILY TRUST - Q and A on Tax Issues

Questions and Answers from our reader's requests:

What is the cost of setting up a Joint Spousal Partner Trust? What are the recurring annual costs, if any?

Why should we do business with The Kuvasz Tax&Family Trust Company? Why don't I just call a Tax Lawyer?

Do Trust need to pay taxes?

What is the tax rate that inter vivos trust needs to pay?

Do the beneficiaries get taxed on the income from the trust?

Is there a difference on how a testamentary trust and an inter vivos trust are taxed?

Does the trust need to pay taxes if the income is below the basic personal amount credit?

Are there any taxes when transferring assets into an inter vivos trust?

Are there any exemptions from taxes when transferring to a trust?

Q: What is the cost of setting up a Joint Spousal Partner Trust?
What are the recurring annual costs, if any?

A: All Testamentry Trusts for Canada are priced according to our Service Packages page. If off-shore or higher level of sophisitication is requested by our clients, pricing is adjusted to accomodate these requests.

Annual costs are nominal for Lay-Trustee managed T-3 (Trust)tax reporting; similar to the costing for a junior T-4 tax return ($150-$350). Trusts that see regular activity with stock sales and purchases for example, should be managed by a Professional Trustee and ongoing costs are typically 3%-5% of the total value of the assets within the Trust itself. Incorporations are taxed according to CRA (Canada Revenue Agency) guidelines.

Q: Why should we do business with The Kuvasz Tax&Family Trust Company? Why don't I just call a Tax Lawyer?

A: The Tax&Family Trust Company provides all the related professional services required for proper Legal Trust adaptation, for one low, flat rate price prior to using a Lawyer.

MORE:  It is a misconception that a Lawyer can properly & professionally provide all the detailed Accounting, Trustee, Financial Planning and Insurance segments that you need to know about before going to see the lawyer.  

And if they do - you are paying too much. 

Would you pay your Electrician to do your yard work? 

so......Why Pay More?

Affordable Family Trusts:  Your Sword & Shield for Business.... for life.

The Kuvasz Tax & Family Trust Company

Q: Do Trust need to pay taxes?

A: A trust is taxed as an individual for income tax purposes and are required to file tax returns and to pay income tax.

Q: What is the tax rate that inter vivos trust needs to pay?

A: The inter vivos trust pays tax each year at the top marginal rate on any income that remains in the trust. Every 21 years, assets that remain in an inter vivos trust are taxed as if they had been sold at fair market value. Assets transferred to an alter ego trust continue to be taxed at the settlor's personal tax rate.

Q: Do the beneficiaries get taxed on the income from the trust?

A: Income paid out to beneficiaries is taxed in their hands at their personal tax rate.

Q: Is there a difference on how a testamentary trust and an inter vivos trust are taxed?

A: Unlike an inter vivos trust, a testamentary trust's income is taxed on a graduated scale so it pays lower rates when its income is low and higher rates when its income is high.

Q: Does the trust need to pay taxes if the income is below the basic personal amount credit?

A: No, Trusts and estates do not get basic personal credits.

Q: Are there any taxes when transferring assets into an inter vivos trust?

A: The transfer of capital property into an inter vivos trust was considered to be a disposition of that property, attracting taxes on any capital gains accrued thereon. However, there are some exceptions.

Q: Are there any exemptions from taxes when transferring to a trust?

A: In 2001, the Income Tax Act was amended to permit taxpayers aged 65 years or older to transfer property inter vivos into a trust on a tax deferred basis. Provided that the trust qualifies as either an alter ego or joint partner trust, taxes on accrued capital gains are deferred until the earlier of the death of the beneficiary of the trust or the disposition of the property.