Forms T1141 and T1142: Non-Resident Trusts
Transfers to and distributions from non-resident trusts, the exceptions, deadlines, and penalties
Reviewed by the Fairlight Accounting cross-border tax team — U.S. & Canadian Tax Desks
Forms T1141 and T1142 are the CRA information returns for dealings with non-resident trusts. A Canadian resident who transfers or lends property to one — such as a U.S. family trust — must file T1141; a Canadian beneficiary who receives a distribution from or owes money to one must file T1142. Both are due with the return.
On this page
Who files
| Form | Trigger | Common cross-border case |
|---|---|---|
| T1141 | Contributions or loans to a non-resident trust (subject to exceptions) — filed every year the person remains a contributor, even with no new transfer | A Canadian parent funding a U.S. trust for a child |
| T1142 | Distributions received from, or debts owed to, a non-resident trust | A Canadian resident beneficiary of a U.S. parent's trust (estates in administration are excluded) |
Exceptions cover arm's-length transfers (not contributions under section 94); filers that are mutual fund trusts or corporations, registered investments, or other exempt persons; contributions to exempt foreign trusts, foreign retirement arrangements such as a U.S. IRA, and unit trusts with at least 150 beneficiaries; and an individual's first year of Canadian residence. For T1142, distributions from a non-resident estate during its administration are excluded (no time limit is stated) — but distributions from a continuing testamentary trust afterward are not — and no T1142 is needed for a trust already reported on T1134, T1135, or T1141.
Why it matters
A non-resident trust with Canadian contributors or beneficiaries is deemed resident in Canada under section 94 if, at its year-end, it has a Canadian-resident contributor, or a Canadian-resident beneficiary and a connected contributor — and is then taxable in Canada on its income — so the reporting is the CRA's tool for finding those trusts. The U.S. counterpart is Form 3520 (the Form 3520 guide).
Deadlines and penalties
Due on the filer's return due date (April 30 for most individuals, June 15 if self-employed; T1141 for the year that includes the trust's year-end). Late filing costs C$25 a day for up to 100 days (C$100 minimum, C$2,500 maximum). Knowing or grossly negligent failures cost C$500 a month for up to 24 months (T1141 only), or C$1,000 a month after a CRA demand (both forms), to C$24,000 less earlier penalties; a T1141 failure beyond 24 months adds 5 percent of the property transferred or loaned. Knowingly false statements or omissions cost the greater of C$24,000 or 5 percent (T1141), or C$2,500 or 5 percent (T1142).
Frequently asked questions
When do I file Form T1142?
When you, as a Canadian resident, receive a distribution from or owe money to a non-resident trust, unless an exception applies.
Does an inheritance from a U.S. estate require T1142?
Not for distributions from a non-resident estate during its administration. Once administration ends, distributions from a continuing trust — such as a U.S. trust created under the will — must be reported.
What is T1141?
The form for Canadian residents who transfer or lend property to a non-resident trust — filed every year they remain a contributor.
Can a U.S. trust be taxed in Canada?
Yes — under section 94, a non-resident trust with a Canadian-resident contributor, or a Canadian-resident beneficiary and a connected contributor, is deemed resident in Canada and taxable there.
Official sources
The CRA explains: “Form T1141 is required to be filed for each tax year that a person is or continues to be a contributor, connected contributor, or resident contributor to a non-resident trust, arrangement, or entity in the tax year of the non-resident trust, arrangement, or entity, and every year thereafter.” — Canada Revenue Agency, About Form T1141, https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/foreign-reporting/about-form-t1141.html
Next step
Fairlight Accounting is a cross-border accounting and tax practice with a U.S. Tax Desk and a Canadian Tax Desk. Our Canadian Tax Desk handles T1141 and T1142 reporting, section 94 analysis, and coordination with U.S. trust filings. See pricing or book a call.
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U.S. and Canadian filings prepared together by our U.S. and Canadian Tax Desks.
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