Letter to Clients Regarding New Filing Requirements for Trusts

Currently, only Trusts that have taxes payable, disposed of a capital property or distribute income or capital to beneficiaries are required to file a Trust return (i.e., Family Trust, Personal Trust). For the taxation years ending December 31st, 2023, and onward, the proposed new rules will impose the following:

1. Additional information will be required to be reported to the Settlor, Trustees,
Beneficiaries, and Protectors (as applicable). This information includes their full name, address, date of birth, country of residence and taxpayer identification number. Please see the Trust Information fillable PDF form.

2. Bare Trust arrangements will also be required to file a Trust ‘return’ which will consist of the additional information form noted above. A Bare Trust can be as simple as one entity, such as a corporation or an individual, that holds an asset or investments in trust for another entity or individual. Do you receive tax slips that are in trust for another party? If so, that is an example of a Bare Trust arrangement.

3. Many Trusts that were not required to file previously, e.g., have no income or taxes owing, are now required to file a Trust return each year as a result.

If you have an existing Trust that we assist with, please fill out the fillable PDF form and return it to Clarissa Vleming: cvleming@cb-ca.ca.

The Trust Deed or Will has names of the Settlor, Trustees, Beneficiaries and Protectors, but not the additional requested information on the form. We are collecting this information ahead of time in anticipation of the new reporting requirements. If you require assistance with filling out this form, please contact our office.

If you believe you may have a Bare Trust arrangement or require assistance to help you determine if such an arrangement exists, please contact one of our accounting managers or partners to discuss.

Some types of Trusts are exempt from these new proposed rules and the most common are new Trusts that will have existed for less than 3 months. As well as Trusts that hold less than $50,000 in cash and/or publicly traded investments throughout the 2023 tax year (and do not hold any other assets, such as real property or private company shares), Graduated Rate Estate Trusts and Qualified Disability Trusts.