The following instructions are taken from the form.
Information and instructions
This credit is for foreign income or profits tax a trust paid on income from outside Canada and reported on the trust's Canadian income tax return. Tax treaties with other countries may affect whether the trust is eligible for this credit.
Note
If a deduction was claimed on line 44 of the trust's return for income that is not taxable in Canada under a tax treaty, do not include that income in the trust's "Net foreign non-business income" (line 22092) or in the trust's "Net foreign business income" (line 22094). Also, do not include any foreign tax withheld from the income in the trust's "Non-business income tax paid to a foreign country" (line 22091) or in the trust's "Business income tax paid to a foreign country" (line 22093).
Use this form to calculate the trust's credit for non-business income tax and business income tax paid to a foreign country. If the trust paid non-business income tax or business income tax to more than one foreign country, calculate the trust's credit for each country on a separate sheet. Add the totals of these credits to line 3 and/or line 11 of Form T3 FFT, T3 Federal Foreign Tax Credit for Trusts. Attach a copy of each sheet to the trust's return.
In most cases, the foreign tax credit the trust can claim for each foreign country is the lower of the following two amounts:
- the foreign income tax the trust actually paid
- the tax otherwise due in Canada on the trust's net income from that country
Note
If the trust paid tax on income from property outside Canada (other than real or immovable property), the trust’s non-business foreign tax credit for that income cannot be more than 15% of the trust's net income from that property. However, the trust may be able to deduct the part of the foreign taxes it paid over 15% on line 21 of the trust’s return.
How to claim:
Do all calculations in Canadian dollars. You must convert to Canadian dollars any income tax payable to a foreign government and income sourced outside Canada that are denominated in a foreign currency. For information about acceptable ways of converting these amounts, see Income Tax Folio S5-F2- C1, Foreign Tax Credit.
If the trust was a member of a partnership and may claim part of the foreign tax the partnership paid, include the amount shown in the partnership’s financial statements or in box 171 and box 172 of the T5013, Statement of Partnership Income in the trust's calculations.
Claim the amount from line 12 of this form on line 24 of the trust’s Schedule 11. That amount should not be more than the amount on line 23 of Schedule 11.
The trust may be able to claim a provincial or territorial foreign tax credit if the trust’s federal foreign tax credit on non-business income is less than the tax it paid on non-business income to a foreign country, and the trust was not a resident of Quebec on December 31, 2024. To calculate that credit, fill out Form T3 PFT, T3 Provincial or Territorial Foreign Tax Credit for Trusts. Attach the form to the trust’s completed T3 return.
If the trust was a resident of Quebec on December 31, 2024, see the Guide TP-646.G-V for filing the trust income tax return for Quebec.
On line 21 of the trust's return, the trust may be able to deduct the net foreign tax it paid but did not receive a foreign tax credit for. However, it cannot deduct some taxes it paid, such as the tax on amounts it could have deducted under a tax treaty on line 44 of its return as tax-exempt income. For more details, see Income Tax Folio S5-F2-C1, Foreign Tax Credit.income tax return for Quebec.
Supporting documents – Attach proof of the foreign income earned and the related foreign tax the trust paid to a foreign country (or countries). This proof may include:
- letters, statements, or receipts from the payer of the income
- information slips in the trust’s name, such as T5013, T3, or T5 slips