2019-0809651C6 STEP 2019 – Q10 – Non-resident Estate as GRE

Principal Issues: 1. Does the requirement for a SIN or “such other information as is acceptable” in paragraph (c) of the definition of a GRE in subsection 248(1) preclude a non-resident individual’s estate from meeting the definition of a GRE? 2. What would the CRA consider “such other information as is acceptable” to meet the requirement in paragraph (c) of the definition of a GRE?

Position: 1. No 2. ITN or TTN is acceptable.

Reasons: 1. The requirement is not aimed at restricting the estate of a non-resident individual from being a GRE. 2. These unique identifiers allow the CRA's T3 Assessing section to track the GRE to the deceased individual.

Author: Mathanda, Tara
Section: 248(1) "graduated rate estate"

2019 STEP CRA Roundtable – June 7, 2019

QUESTION 10. Graduated Rate Estate and Non-resident individual or estate

An individual who was a U.S. citizen and resident in the U.S. throughout their life owned real estate in Canada at the time of their death.  The individual had never worked in Canada and as such did not have a Social Insurance Number (“SIN”). Assume that the executor of the estate is resident in the U.S. and all decisions related to the estate are made in the U.S. such that the estate is factually resident in the U.S.  The executor filed a T1 return for the deceased, reporting a capital gain in respect of the deemed disposition of the real property at death. The executor anticipates that the estate will also realize a gain on the disposition of the property.

Does the requirement for a SIN or “such other information as is acceptable” in paragraph (c) of the definition of a graduated rate estate (“GRE”) in subsection 248(1) preclude an estate from meeting the definition of a GRE in its first taxation year where the deceased person is a non-resident?  Can an estate be a GRE where the estate is not resident in Canada?  If GRE status is possible in these situations, what would the CRA consider as “such other information as is acceptable” to meet the requirement in paragraph (c) of the definition of graduated rate estate?

CRA Response

The conditions within the GRE definition in subsection 248(1) do not require that an estate or individual (immediately before their death) be resident in Canada. Instead, the condition for the estate to provide the SIN or “such other information as is acceptable” in paragraph (c) of the definition of a GRE relates to the fact that a deceased individual can only have one estate.  This requirement allows the CRA to ensure that only one GRE designation can be made for a deceased individual.

We have confirmed with the CRA T3 Trust Returns Assessing Section that in order to meet the “other such information” condition, an estate may provide a temporary tax number (TTN) or individual tax number (ITN) for the deceased individual on the trust return, if a SIN is not available.

Tara Mathanda
2019-080965

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