New Trust Reporting Requirements - UPDATE

The legislation to support this proposed measure is pending. The CRA will administer the new reporting and filing requirements once there is supporting legislation that receives Royal Assent.  The CRA will continue to administer the existing rules for trusts, under enacted legislation. The proposed beneficial ownership reporting requirements are not part of the published 2021 T3 income tax return. You should not delay filing your 2021 T3 tax return.

The Department of Finance Canada released draft tax proposals for public comment on February 4.  See clauses 14-18 in the legislative proposals and explanatory notes for the draft legislation for the Reporting Requirement for Trusts. This draft legislation contains changes and would be applicable for taxation years that end after December 30, 2022. It provides clarification on solicitor-client privilege and the inclusion of bare trusts, and provides an exclusion for trusts where all the units of the trust are listed on a designated stock exchange.

 

The Canada Revenue Agency (CRA) has updated its filing requirements in response to the 2018 Federal Budget that introduced enhanced trust reporting requirements for taxation years ending December 31, 2021 and onwards

The new reporting requirements will result in the following:

  • Trusts, such as family (income splitting) trusts that already file T3 returns will be required to disclose significant additional information;
  • Certain trusts, such as holding trusts, that did not have to file a T3 return before will now be required to file one annually and will also be required to disclose significant information

INFORMATION REQUESTED; Trusts will be required to provide details as noted below for each trustee, beneficiary settlor and any person or entity with the ability to exert influence over trustee decisions. The required details are:

  • Name
  • Address
  • Date of Birth
  • Residence (for tax purposes)
  • Social Insurance Number/Business Number/Trust Account Number/Foreign Taxpayer Identification number

PENALTIES: Failure to file 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 return or male a false statement or omission in the trust return, either knowingly or due to gross negligence.

PREPARATION: The summary above is a brief overview. These rules are in effect for 2021 T3 returns and thus will be relevant for T3 returns that are due March 31, 2022. In order to prepare for compliance with these rules, we request that you provide a full copy of your trust agreement as well as provide the required information as noted above.

Filed in: Advice Articles

Author

Categories

Privacy Policy

Bluenose Accounting (the “Firm”) is committed to maintaining the confidentiality, security and accuracy of your personal information. The Firm collects uses and discloses personal information related to its clients and employees to the extent required to provide requested services for those clients, to fulfill its professional responsibilities and operate its business. We are committed to protecting the privacy of information in our possession and control. To that end, the Firm has established a Privacy Policy to protect the privacy rights of its clients, employees and others. The Firm’s Privacy policy sets out principals and guidelines it follows in order to meet its privacy commitments and complying with provincial and federal privacy legislation. This policy relates to the collection, use and disclosure of personal information by the firm, its partners and employees.

What is Personal Information?

The firm defines personal information as any information that the firm receives as a part of servicing individuals, or indirectly, through clients that are organized as corporations, not-for profit organizations, charities or other like organizations in addition to information related to its employees and partners. Such information would include, but is not limited to, names, addresses, telephone number, age, sex, marital status, identifying numbers, education status and medical history. A more detailed definition can be found in the Freedom of Information and Protection of Privacy Act of Nova Scotia. The Firm only collects information required to provide the services requested and agreed upon. Such information is contained as required within filings with government agencies or as part of its working papers as required by professional standards, rules of professional conduct and regulation.

The Firm’s Commitment

The Firm has established and put into place policies and procedures designed to protect personal information. The firm has communicated to its partners and employees its policies with respect to privacy and has established responsibilities for all individuals with access to private information. The firm has designated Anthony Fielding Ph.D., CA (anthony@bluenoseaccounting.com) as its Privacy officer.

Consent

Information provided to us, including that collected from our website, is used solely for the purpose of the service(s) indicated and is often, but not always, set out in its engagement letter. Should you advise us at any time that you no longer consent to the use of the personal information that you have provided to us, we will take your information off our database.

Safeguards

The Firm protects the privacy of personal information in its possession by using security safeguards appropriate to the sensitivity of the information. Such safeguards include physical restriction (locked premises and security systems) and electronic protection (password protection and encryption).

Legal Disclaimer

Although we make every effort to preserve user privacy, we may need to disclose personal information when required by law when we have a good-faith belief that such action is necessary to comply with a current judicial proceeding, a court order or legal process.

Other Use of Your Information

Except as set out in this Privacy Policy, we do not make any other use of the personal information which you provide to us unless you have consented to its use for any other purpose. We do not sell or disclose your personal information to anyone, except as required by law.

Website

In using our website, you consent to the collection, use and disclosure of your personal information in accordance with this Privacy Policy.

×

Terms of Use

Terms of Use

The use of this web site is governed by the terms and conditions as set out below. By using this web site, you have agreed to be bound by these terms.

Copyright

The information contained within this site, including the underlying HTML, text, images and any other content is the property of Bluenose Accounting (the “Firm”). Any reproduction or redistribution of content of this site without the express written permission of the Firm is strictly forbidden.

Disclaimer

The information provided in this site is free of charge and is for information purposes only. Such information should not be relied upon or used as a basis for decisions. The Firm has made all efforts to maintain the accuracy of the content of this web site. Information provided on this web site is provided without any warranties of any kind. The Firm assumes no responsibility or liability for damages that may arise from the use of this site or of any information contained within.

External Links

The Firm may provide external links to third party sites and some content provided on this site may actually be from third party sites. The Firm assumes no liability for the accuracy of third party information contained within this site or in those reached through links contained within this site. Any links are provided for information purposes only and are not to be construed as an endorsement by the Firm. The Firm has not reviewed or otherwise attempted to verify the accuracy of information contained within such sites.

The Firm assumes no responsibility or liability for damages that may arise from the use of these links including any computer security issues such as, but not limited to, viruses, Trojan horses or other disruptive code which may be downloaded or transferred from such linked sites.

Acknowledgement

By using this site, you are agreeing to the terms and conditions as set out above. Any use of information contained within this site is not to be construed as professional advice and the use of such information does not relieve you from applying the standard of care and due diligence relevant to the use of such information contained in this web site. You are solely responsible for verifying the accuracy and reliability of all information contained within this web site.

×