Canadian Trusts Used As Tax Cover Up
A Quebec Superior Court has found that wealthy French families used Canadian trusts to escape France's wealth tax for years. The case detailed a scheme by investment professionals and legal experts to cover up billions in wealth from French tax authorities which painted an unfavourable picture of Canada as a haven for the ultra-rich. The lawsuit centred on a conflict over trust administration between a law firm owned by two Paris-based attorneys and Blue Bridge Wealth Management Inc., a Montreal, QC-based wealth management company. Both parties collectively managed up to 10s of billions of euros for wealthy French families, which they dispersed across at least 300 trusts. Judge Bernard Synnott, of the Quebec Superior Court, focused largely on the behaviours of the trust managers and the strategies allegedly employed to hide identities and evade paying taxes. These included destroying and discarding laptops to protect the identities of the trust beneficiaries, exchanging faxes rather than eMails, and referring to clients by acronyms or nicknames. In 2021, Canadian courts ruled that the group could no longer withhold information on the beneficiaries from French authorities. A court decision on a disagreement with the French tax authorities questioning the validity of the taxes on the capital of Canadian trusts is anticipated in early February.