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New Tax Reporting Requirements for 2023

Effective for taxation years ending December 31, 2023 and thereafter, the federal government has introduced legislation requiring a T3 Trust Income Tax and Information Return to be filed for any “bare trust” ownership structures. 

A “bare trust” is a relationship whereby the legal ownership of property is held by a trustee (or trustees), but the beneficial interest in the property is retained by the beneficiary (or beneficiaries).  Common examples of bare trust relationships include:

  • Corporations/individuals holding legal title to real estate on behalf of other individual beneficiaries;
  • In Trust For (“ITF”) accounts holding cash and investments on behalf of minors;
  • Bank/investment accounts held jointly between spouses, or between parents and children. 

Bare trusts that have been in existence for less than 3 months, or hold assets of less than $50,000 throughout the year, might be excluded from the new trust reporting requirements.

The deadline to file the T3 Trust Income Tax and Information Return for the 2023 taxation year is March 30, 2024.  While there are no income taxes that will be triggered as a result of filing the tax return, it is important to note that late-filed returns will be subject to significant penalties.  

If you own any assets by way of a bare trust relationship, we strongly encourage you to contact a member of our team to see if the new trust reporting requirement will be applicable to you.