Update for March 28, 2024: The Canada Revenue Agency (CRA) has announced that Bare Trusts are now exempt from trust reporting requirements for the 2023 tax year – more info follows.
To paraphrase the update, we’re quoting the post New – Bare trusts are exempt from trust reporting requirements for 2023:
Our original post text follows, with the now-obsolete text struck out.
Joint accounts and in-trust-for accounts could be potentially captured by new T3 trust filing requirements for the December 31, 2023 year-end, with filing due by April 2, 2024* (note that to our knowledge, penalties for late filing for the 2023 tax year have been waived).
The new reporting requirements were initially applicable only to express trusts, which are trusts created using the settlor’s clear written or verbal intent (as opposed to arising by operation of law). However, these rules were later expanded to include bare trusts, which are defined under the legislation to include “an arrangement where a trust can reasonably be considered to act as agent for its beneficiaries with respect to all dealings in all of the trust’s property.”
Do you suspect you may be affected by these new requirements? In light of the potentially heavy penalties that may be levied on individuals who do not properly comply, Fiscal Agents recommends contacting your tax professional or legal advisor for further clarification with respect to your individual situation.
