The CRA acknowledges impact of bare trust filings on Canadians
On March 28, 2024, the Canada Revenue Agency (CRA) announced it would no longer require bare trusts to file a T3 Income Tax and Information Return (T3 return) – including Schedule 15 (Beneficial Ownership Information of a Trust) – for the 2023 tax year unless the CRA makes a direct request for these filings. This announcement recognizes the new reporting requirements for bare trusts have had an unintended impact on Canadians. This follows a series of adjustments to the CRA’s administrative policy surrounding bare trusts and the penalties associated with these filing for 2023.
In this announcement, the CRA also advised they will be working with the Department of Finance to further clarify its guidance on this filing requirement. While this is a welcome step, this issue will continue into the 2024 filing year without legislative change to narrow and clarify the scope of what types of trusts and bare trusts will be required to file.
These rules were first announced by Finance in the 2018 federal budget to enhance reporting requirements for trusts, including the requirement to file an annual T3 return. These rules were enacted in 2022, and this applied to taxation years ending on or after Dec. 31, 2023.
We will continue to monitor these announcements and legislative changes, and as material events occur, we will provide updates. If you have any questions or concerns regarding these changes, please contact your Baker Tilly advisor.
Appendix – A history of the new trust reporting rules
2024: Year of the trust (Jan. 17, 2024)
Musts for trusts – New reporting requirements (Jan. 12, 2023)
Trust reporting – lawyers beware (March 10, 2021)
Attention all trust administrators: time is running out! (Oct. 22, 2020)
Trust reporting in 2021 will come sooner than you think (Feb. 20, 2020)
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