The new reporting requirements mean that affected trusts will be required to file a T3 Trust income tax and information return and a Schedule 15 (Beneficial Ownership Information of a Trust) with the Canada Revenue Agency (CRA) every year. Many trusts will be filing a T3 return for the first time. Before the introduction of the new reporting requirements, a trust that did not earn income, dispose of capital property, or make distributions of income or capital in a year was generally not required to file an annual return. Schedule 15 form requires the trust to provide information about all reportable entities such as trustees, settlors, beneficiaries, and controlling persons for the trust, including those who may have been a reportable entity for only part of the year. The information required includes the name, address, date of birth, jurisdiction of residence, and tax identification number of each reportable entity. The Schedule 15 is used to help the CRA identify and prevent tax evasion, money laundering, and other financial crimes. Certainly! If there are beneficiaries that cannot be listed by name because they were unknown at the time of filing the trust return, the trust must provide the details of the terms of the trust that extends the class of beneficiaries to unknown entities. The trust must also provide relevant information regarding any beneficiaries that cannot be listed by name (for example, unborn children and grandchildren, spouses).
Some trusts are exempt from the new reporting requirements, such as registered plans, qualified disability trusts, and more. Registered plans include registered retirement savings plans (RRSPs), registered retirement income funds (RRIFs), and tax-free savings accounts (TFSAs). Qualified disability trusts are trusts that have been created for the benefit of a person who is eligible for the disability tax credit. Other trusts that are exempt include trusts that have been in existence for less than three months, trusts that hold less than $50,000 in assets throughout the year. The government has provided a comprehensive list of trusts that are exempt from the new reporting requirements on the CRA website.
The following information are required in order to comply with the new reporting requirements (source: Canada.ca):
Trust Account Number: You will need to have a trust account number before filing a T3 return. Make sure to include your trust account number on the trust return, all correspondence, and payments related to the trust. To obtain your trust account number instantly, use the Trust Account Registration service in:
My Account – from the “More services” option
My Business Account – from the “Open new account” option
Represent a Client – from the main menu
To comply with the new reporting requirements, an affected trust must provide additional information for all reportable entities such as trustees, settlors, beneficiaries, and controlling persons for the trust, including those who may have been a reportable entity for only part of the year.
The deadline for filing the T3 Return and 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. Trusts with a December 31, 2023 tax year end will need to file their T3 Return and Schedule 15 by March 30, 2024. Since March 30, 2024 falls on Saturday, your 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).