New Trust Reporting Requirements – Big Implications?

All trustees need to be aware that trust reporting requirements are changing. 

Currently, a trust only needs to file an income tax return in certain circumstances, including if it earns income, disposes of capital property, or makes distributions to beneficiaries during the year. There is no current requirement to identify all of the trust's beneficiaries.

However, the 2018 Federal Budget announced that starting in 2021, except for specifically exempted trusts, trusts resident in Canada and non-resident trusts required to file in Canada will need to:

1. file income tax returns annually;
2. report all the settlors, trustees and beneficiaries; and
3. identify persons who exert control over trustee decisions related to income and capital ("protectors").