Update: Bare Trusts No Longer Required To File T3 Returns For 2023
28 March 2024
In our previous blog post,[1] we discussed the Canada Revenue Agency’s (the “CRA”) expanded trust filing and reporting requirements for trusts with tax years ending on or after December 31, 2023. These new filing requirements were implemented for all express trusts, including bare trusts.[2]
However, the introduction of these expanded filing requirements caused quite an uproar in the accounting and legal communities. So much so that, in a massive shift, the CRA just announced that it will no longer require a T3 filing for bare trusts with a December 31, 2023 tax year end, including the new Schedule 15 (Beneficial Ownership Information of a Trust), unless specifically requested. On 28 March 2024, the CRA announced the following:
“In recognition that the new reporting requirements for bare trusts have had an unintended impact on Canadians, the Canada Revenue Agency (CRA) will not 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.”[3]
The CRA clarified that, over the coming months, it will be working with the Department of Finance to clarify its guidance on the T3 filing requirements for bare trusts and will communicate with the public as more information becomes available.
While the future for T3 reporting requirements remain uncertain, the CRA’s reversal is sure to bring a sigh of relief for many struggling with the expanded requirements in advance of the 2 April 2024 filing deadline. A PDF of this blog is available for download here.
If you have any questions about the above information, please contact a member of the Gardiner Roberts LLP’s experienced Tax and Estates Planning Group.
[1] https://grllp.com/trust-reporting-season-is-here-your-primer-on-the-new-requirements-for-2023
[2] Income Tax Act, ss. 150(1.3) [Act].
[3] New – Bare trusts are exempt from trust reporting requirements for 2023 – Canada.ca.
(This blog is provided for educational purposes only, and does not necessarily reflect the views of Gardiner Roberts LLP).
