Trust Reporting

There are new reporting requirements for many trust arrangements for tax years ending after December 30, 2023.  The changes outlined below may result in a situation where a trust is required to file for the first time.  The main changes under the new trust reporting requirements are:

  • All trusts, unless certain conditions are met, will be required to file an annual T3 Return with the CRA.
  • Trusts that are required to file a T3 Return (other than listed trusts) generally need to complete Schedule 15 (see information required below) in their annual T3 return to report beneficial ownership information.
  • Bare trusts include an arrangement where legal title and beneficial ownership are different.  Bare trusts can include situations such as:
      • a parent a parent is on title of a child’s home for financing purposes
      • a child is on title of a parent’s home for estate planning purposes
      • a parent or grandparent holds investments or bank accounts in trust for a child
      • a child’s name is on their parent’s investment account for ease of administration
Trust Information Required

Penalties

Failure to make the required filings and disclosures on time attracts penalties of $25/day, to a maximum of $2,500, as well as further penalties on any unpaid taxes. New gross negligence penalties may also apply, being the greater of $2,500 and 5% of the highest total fair market value of the trust’s property at any time in the year.

 

Exceptions

Certain types of trusts are excluded from these additional reporting requirements, including trusts that:

  • Have been in existence for less than three months at the end of the calendar year
  • Hold only money and certain other designated financial assets that have a total fair market value that does not exceed CA$50,000 throughout the year
  • Have all of their units listed on a designated stock exchange
  • Are mutual fund trusts
  • Are designated as GREs

Please contact us for assistance in determining your reporting requirements.