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ARTICLE · 09 OCTOBER 2023

Bare Trusts Must Report Beneficial Ownership Information Annually Under New T3 Rules

Changes to the Income Tax Act in 2023 will require bare trusts to report annual beneficial ownership information.

CanadaCorporate/Commercial Law

Changes to the Income Tax Act in 2023 will require bare trusts to report annual beneficial ownership information. These new rules, and other changes to trust reporting requirements, were discussed in a prior client insight from our Canadian Tax group, which you can access here.

Under previous rules, bare trusts were not required to file a T3 Return. Subject to a few exceptions, bare trusts must now file a T3 Return annually, even if there is no income to report, which identifies all trustees, settlors, beneficiaries and controlling persons on an accompanying Schedule 15. For bare trusts with a December 31, 2023 year end, filings must be completed by March 31, 2024.

For the purpose of the new rules, a bare trust is an arrangement under which a trust can reasonably be considered to act as agent for all the beneficiaries under the trust with respect to all dealings with all of the trust's property. This includes structures commonly used to own real estate, where legal

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