Good afternoon,
My name is Julia, and I am here to discuss the new reporting requirements for trusts.
These rules will apply to Trusts that have tax years ending after December 30, 2023.
So, for those of you who have a Trust with a period ending December 31 – these rules will be applicable to your 2023 Trust return that is due March 30, 2024.
There are significant penalties if these rules are not followed so it is important to understand if these rules will apply to you.
The new rules state that express trusts (which most trusts are considered to be) are now are required to file an annual T3 return, even though they may have not been in the past. These Trust returns are also required to disclose personal information, such as the SIN, address, and name of all the parties to the trust that being the settlor, trustee, beneficiary and those who exert control over the trust.
CRA has listed trusts that are specifically exempted from these rules, the full listing can be found on our website (attached below), but the most notable exceptions are: Lawyers general trust accounts, graduated rate estates and trusts with assets that have a fair market value less than $50k.
It is also important to note that bare trusts for the first time are now required to file tax returns because of these rules. Bare Trusts arise in situations when the person who is legally on title of an asset is not the true economic owner.
If you are unsure if these new rules will apply to your trust, please contact us and we’d be more than happy to help you navigate through these new requirements.