Solicitor-client privilege & new CRA reporting requirements
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Hold any property in trust
Protect your interests. Understand the new trust reporting rules if you:
Submitting a 10-page report approved by your board or other governing body
Answering an online questionnaire
What is required?
New tax reporting requirements for trusts have recently come into effect in Canada. The new trust reporting obligations require information that may otherwise be subject to privilege to be disclosed regardless of whether a CRA audit has been commenced. This means that taxpayers will need to consider asserting privilege over any of the information that may otherwise be reportable without context for the risks of waiving privilege. The trust reporting requirements are broad and may impact many common commercial arrangements.
Solicitor-client privilege protects the client and ensures the communications between lawyer and client are held in confidence. It is distinct from confidentiality and is a fundamental component of the legal system. There are some occasions where a client may choose to waive solicitor-client privilege, on the advice of their lawyer, depending on what is requested to be disclosed. New trust reporting rules may put solicitor-client privilege at risk.
Are you prepared to protect your solicitor-client privilege?
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BWray@blg.com
T 613.787.3570
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Benedict S. Wray
FJolicoeur@blg.com
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François Joli-Coeur
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LLevine@blg.com
T 416.367.6672
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Laura Levine
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Trust reporting requirements and solicitor-client privilege
During a tax audit, the Canada Revenue Agency (CRA) frequently requests information from a taxpayer or their advisors, which is subject to solicitor-client privilege. Typically, the taxpayer may choose to waive privilege and disclose such information or may resist disclosure based on privilege and on the advice of their lawyer. Unresolved privilege disputes with the CRA can end up in the courts to determine what, if anything, must be disclosed.
Are the beneficiary of a trust
Hold property for a relative on their behalf
Have an arrangement where someone is acting as a beneficiary e.g., private family trust that holds private company shares
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Are a beneficiary of tax or estate planning
LGoldbach@blg.com T 403.232.9707
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Laurie Goldbach
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PCross@blg.com
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Pamela L. Cross
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GPereira@blg.com
T 416.367.6092
Partner
Grace Pereira
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Familiarize yourself with the new trust reporting rules and talk to your lawyer.
1
Consider the issue of solicitor-client privilege in tax matters before a tax audit starts.
2
Conduct a cost-benefit review with your lawyer before waiving privilege.
3
How to protect your solicitor-client privilege and your information:
New tax reporting requirements for trusts have recently come into effect in Canada. The new trust reporting obligations require information that may otherwise be subject to privilege to be disclosed regardless of whether a CRA audit has been commenced. This means that taxpayers will need to consider asserting privilege over any of the information that may otherwise be reportable without context for the risks of waiving privilege. The trust reporting requirements are broad and may impact many common commercial arrangements.
Hold any property in trust
Hold property for a relative on their behalf
Are the beneficiary of a trust
Have an arrangement where someone is acting as a beneficiary e.g., private family trust that holds private company shares
Protect your interests. Understand the new trust reporting rules if you:
LLevine@blg.com
T 416.367.6672
Partner
Laura Levine
View bio