On October 29, 2024, the Canada Revenue Agency (“CRA”) announced that it 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 (“Schedule 15”), for the 2024 tax year, unless the CRA makes a direct request for these filings. A similar announcement was made by the CRA in late March of this year, exempting bare trusts from the new trust reporting requirements for the 2023 tax year.
Other affected trusts, however, are still required to report for taxation years ending on or after December 30, 2023. A T3 return, including Schedule 15, must be filed unless specific conditions are met.
The deadline for the T3 return is no later than 90 days after the trust’s tax year-end. Trusts with a calendar tax year-end must file their 2024 T3 Return no later than March 31, 2025.
There is a significant penalty related to the enhanced trust reporting requirements. For offences due to gross negligence, forget to file, or false statements/omissions on T3 return, the penalty is the greater of $2,500 or 5% of the maximum value of the property held during the tax year by the trust.
GG Observations
It is encouraging to see that CRA took the initiative in communicating with taxpayers about its expectations regarding 2024 bare trust reporting requirements well ahead of time. On the other hand, it highlights that the landscape of bare trust reporting requirements is still in flux. Your GG advisors can help assess the ever-changing filing requirements to stay compliant with tax authorities.
