Trusts: what you need to know for 2023 tax filing

Mar 13, 2024

Did you know that the reporting requirements for trusts have changed? Affected trusts are required to file an annual T3 Trust income tax and information return (T3 return), including a Schedule 15 (Beneficial Ownership Information of a Trust), if applicable, with the Canada Revenue Agency (CRA) for tax years ending after December 30, 2023.

Still have questions after you read this? The CRA has published frequently asked questions to help!

Penalty waived for bare trusts 

 

Bare trusts are subject to the new trust reporting requirements and may be required to file a T3 Return, including Schedule 15, every year.

As some bare trusts may be uncertain about the new requirements, the CRA is adopting an education-first approach to compliance and providing proactive relief by waiving the penalty under subsection 162(7) for the 2023 tax year in situations where the T3 Return and Schedule 15 are filed after the filing deadline.

This proactive relief is for bare trusts only and only for the 2023 tax year.

NEW – While the Act also includes a gross negligence penalty under subsection 163(5), as part of the CRA’s education-first approach, the CRA will only apply this penalty in the most egregious cases where a bare trust fails to file. Imposing such penalty would only occur in the context of a compliance action, such as an audit, where all factors and circumstances of the taxpayer’s particular situation are considered together. A gross negligence penalty for failing to file will be subject to oversight and approval by Headquarters, following a mandatory referral.

 

Filing deadline

 

The deadline for the T3 Return, including Schedule 15, is 90 days after the trust’s tax year end. The tax year end for most trusts is the end of the calendar year.

Therefore, trusts with a December 31, 2023 tax year end need to file their T3 Return and Schedule 15 by March 30, 2024. Since March 30, 2024 falls on Saturday, the return will be considered filed on time if the CRA receives it, or it is postmarked, on or before April 2, 2024 (the next business day).

Things to remember when filing

  • The Schedule 15 provides additional information about the trust’s reportable entities – even those who may have only been a reportable entity for part of the year.

  • Make sure to include your trust account number on the trust return, as well as on all correspondence and with payments related to the trust.

  • My Trust Account is a secure portal that lets legal and authorized representatives of trust accounts manage trust information online.

More information can also be found on our Trust Income tax page.

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