The Canada Revenue Agency (CRA) has implemented several new
trust reporting rules that will apply to taxation year-ends
starting December 31, 2021.
The CRA has significantly expanded its reporting and disclosure
requirements for trusts, continuing a previous trend of greater
disclosure of beneficial ownership of trusts. The new requirements
also bring the potential for large penalties for non-compliance by
trustees or other persons assisting with the preparation of T3
trust income tax returns.
New Requirement to File Return
Subsection 150(1.2) of the Income Tax Act,
RSC 1985, c 1 (5th Supp) (ITA), requires an “express
trust” that is resident in Canada to file a T3 trust income
tax return. This rule will apply to trusts that are factually
resident in Canada and trusts deemed to be resident in Canada. The
exceptions to the filing requirement found in subsection 150(1.1)
of the ITA will no longer apply. Instead, a set of new narrow
exceptions apply for trusts such
