Canada: Ontario surtax relief, mutual fund trusts

Ontario surtax relief, mutual fund trusts

Many Ontario-resident mutual fund trusts have been denied Ontario surtax relief for their 2014 tax year-ends. The surtax relief was provided for in a 2014 comfort letter and then enacted in Ontario's 2015 budget, and many mutual fund trusts filed their 2014 annual form T3, Trust Income Tax and Information Return, on the basis that the relief applied. However, the Canada Revenue Agency (CRA) has not yet updated its systems to reflect the change, and has issued notices of assessment denying relief. Some trusts have received system-generated CRA collection notices and calls about payments due.


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The CRA advised the Investment Funds Institute of Canada (IFIC) that their systems will not be updated until 10 August 2015 to reflect the relief from a mismatch of a mutual fund trust's capital gains and Ontario surtax payable on capital gains retained in the fund. After speaking with IFIC, the CRA indicated it would not make any further collection calls on this issue.


Read a July 2015 report prepared by the KPMG member firm in Canada: Mutual Fund Trusts - 2014 Ontario Surtax Relief Hiccup

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