New Reporting Requirements For Trusts

Currently trusts are required to file an annual income tax (T3) return if a trust has tax payable or if it distributes all or part of its income or capital to its beneficiaries. This rule is set to change.

In a bid to improve the collection of beneficial ownership information with respect to trusts and to help the Canada Revenue Agency (the "CRA") assess the tax liability for trusts and its beneficiaries, the federal government, in its Budget 2018, proposed new trust reporting rules. The Bill containing these new rules was given Royal Assent on December 15, 2022.

Under the new rules, all non-resident trusts and express trusts that are resident in Canada (subject to exceptions) will annually have to provide CRA with additional information such as the identity of all trustees, beneficiaries and settlors of the trust, along with the name(s) of each person who has the ability (through the trust terms or a related agreement) to exert control or override trustee