Plain meaning
A statutory rule treating certain unremitted tax amounts as held in trust for the Crown.
Also called
source deduction deemed trust
GST/HST deemed trust
Key points
- Deemed trust rules can apply to source deductions withheld from employees and certain GST/HST amounts.
- The rules can give the Crown priority over some other creditors in collection or insolvency contexts.
- Directors, secured creditors, purchasers, and insolvency professionals may need to consider these provisions.
- The exact priority and collection result depends on the statute, timing, and insolvency law context.
Why it comes up
Deemed trust rules matter when employers or businesses fail to remit source deductions or GST/HST and later face insolvency or collection action.