Attention: Changes to Tax Reporting for 2023 - Trust Filing Requirements
We want to let you know about important changes to tax reporting for 2023 that may affect you, even if you didn't realize you're part of a trust. Canada is tightening its rules to prevent tax evasion and money laundering, and it's crucial to be informed.
Starting this year, trusts (with few exceptions) must file a T3 Trust Income Tax and Information Return annually. This means more paperwork and potential costs for many Canadians, some of whom may not know they are part of a trust.
A trust is a legal arrangement where ownership is separate from benefit. These changes also apply to "bare trusts," where the trustee acts only as directed by the beneficiary. Many Canadians may be in a bare trust without formal paperwork.
How This Affects You:
If you added your name to a family member's home title to simplify property transfer, it's likely a bare trust, requiring a T3 filing.
Parents who co-signed their child's mortgage and have no say over the property may also be in a bare trust.
Canadians who added their name to elderly parents' bank accounts may face filing obligations.
Even with some exemptions, many Canadians may still need to file a T3 return. Our team is here to help you navigate this and ensure compliance.
The Canada Revenue Agency will waive late-filing penalties for bare trusts filing T3 returns for 2023 after March 30, 2024, but not for willful non-compliance, gross negligence, false statements, or omissions.
Please reach out if you have questions or need assistance. Being informed can help you avoid penalties and stress.
Thank you for your trust in Your Bottom Line. We're here to make this tax season as easy as possible for you.
View the full news release from the CRA here: https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2023/new-reporting-requirements-trusts-as-december-31-2023.html