Master trust

A trust may be considered a master trust if it makes an election to that effect (by enclosing a letter with the return for its first taxation year). It must also fulfill the following conditions from the time of its creation:

• It has always been resident in Canada.
• Its only undertaking has been the investment of funds.
• It has never borrowed money, unless the loan was for a period of 90 days or less and was not part of a series of loans or other transactions and repayments.
• It has never accepted deposits.
• Its only beneficiaries have been trusts governed by a registered pension plan (RPP) or a deferred profit-sharing plan (DPSP).

A trust that makes such an election is exempt from income tax and is not required to file the trust return for subsequent taxation years.

For further information, refer to the Guide to Filing the Trust Income Tax Return (TP-646.G-V).