On October 29, 2024, the Canada Revenue Agency (CRA) announced that bare trusts are once again exempt from filing the T3 Income Tax and Information Return (including Schedule 15 regarding beneficial ownership information of a trust) for the 2024 tax year. This is a continuation of the CRA’s decision, announced on March 28, 2024, to exempt those Canadian resident trusts that are bare trusts from filing a T3 return for the 2023 tax year.
The CRA’s announcement aligns with legislative amendments announced by the Department of Finance in August 2024 that propose to remove the requirement for bare trust reporting in 2024 by repealing the applicable provision (subsection 150(1.3) of the Income Tax Act) and replacing it with a modified provision effective starting the 2025 taxation year. The CRA’s administrative relief provides additional comfort to taxpayers that reporting will not be required for 2024 even if the proposed legislative amendments are not ultimately enacted.
Despite the general administrative relief, CRA did note in its recent announcement that it can still make direct requests to require particular bare trusts to complete and file a T3 return. In addition, the new trust reporting rules that came into effect in 2021 continue to apply to other affected trusts unless specific conditions are met. The deadline for filing a T3 return for an affected trust is no later than 90 days after the trust’s tax year-end.
For more information on new reporting requirements for trusts and bare trusts for the 2023 and 2024 taxation years, please visit the Government of Canada Trust Income Tax Return webpage or contact any of the authors or any member of the Bennett Jones Commercial Real Estate group across Canada.