February 15, 2022
New Trust Reporting Requirements
The 2018 budget introduced enhanced trust reporting requirements for taxation years ending December 30, 2022 and onwards.
These new reporting requirements will result in the following:
• Trusts that already file T3 returns will be required to disclose significant additional information;
• Certain trusts that did not have to file a T3 return before, will now need to file it annually and will also need to disclose significant information.
Trusts will need to provide the following details, for each trustee, beneficiary, settlor and any person/entity with the ability to exert influence over trustee decisions (i.e. override trustee decisions over the appointment of income or capital of the trust):
• Date of birth
• Residence (for tax purposes)
• Social Insurance Number/Business Number/Trust account number/Foreign taxpayer Identification number
Failure to file a T3 return and provide this information will result in a penalty of up to $2,500. There is a potential additional penalty equal to 5% of the maximum value of the property held by the trust, with a minimum penalty of $2,500, for those who fail to file a trust tax return or make a false statement or omission in the trust return, either knowingly or due to gross negligence.
Further information about the new reporting requirements can be obtained here.