Update on New Trust Reporting and Filing Requirements


We had previously shared significant changes to the annual Trust reporting and filing requirements for taxation years ending on or after December 31, 2021. These changes required a Trust to file a T3 Trust Income Tax return even if it had no activity in the year.


The CRA has changed their position and announced they will not administer the new reporting and filing requirements until this legislation receives Royal Assent.


What does this mean for you?


For Trusts that have no income taxes payable and have made no distributions or allocations during the year, there is no requirement to file the annual T3 Trust Income Tax return.


However, once the legislation is enacted, a Trust will need to file a T3 annual return regardless of activity during the year. In addition, each Trust will need to report information on all trustees, beneficiaries, settlors, and any person who can exert control or override trustee decisions, including:

  • name and address
  • date of birth
  • country/jurisdiction of residence, and taxpayer ID, such as SIN, trust account number, business number, or taxpayer ID used in a foreign jurisdiction


Although this information is not required to be filed at this time, we encourage you to send the necessary information to your Clearline contact as soon as possible to facilitate a smoother transition for when legislation is enacted.



Tax planning and considerations


For Trusts which no longer serve their intended purpose or are approaching their 21st year anniversary, early consideration should be given to wind up the Trust due to the increased requirements.



If you have any questions or concerns or would like to discuss your specific situation, please get in touch with your contact at Clearline.