Holding a Cottage in Trust
Last week, Globe and Mail columnist Tim Cestnick wrote on cottage ownership through a trust.
This week, Tim follows up his article with “Seven hints for holding a cottage in trust”.
The hints relate to:
1. Dealing with the tax hit upon the transfer to the trust.
2. The taxation of the taxable benefit of using the cottage.
3. The effect of the 21 year deemed distribution rule.
4. U.S. estate taxes.
5. The payment or avoidance of Land Transfer Taxes.
6. The payment or avoidance of HST.
7. Extra requirements in the event that the cottage needs to be mortgaged.
Both articles are worth a read by anyone considering ownership of a cottage through a trust. They highlight the benefits of such ownership, while also raising the myriad of issues and complications that can arise with such a vehicle. Clearly, good advice is needed by anyone considering the use of a trust for cottage ownership
Also, see our blogs and podcasts for more information relating to cottage ownership and succession. Also, just last week, our Ian Hull spoke on BNN about strategies to keep a cottage property in the family.
Clearly, this topic is as hot as our recent taste of summer weather.
Have a great weekend.
Paul E. Trudelle – Click here for more information on Paul Trudelle.