New Trust T3 Return Filing Requirment - Bare Trust Reporting Due March 31, 2024

New Bare Trust Filing Requirement

Effective December 31, 2023, CRA has expanded the reporting requirement and now mandates the Bare Trusts to file T3 Returns on an annual basis. Previously, bare trusts were exempt from filing T3 Returns.
The T3 returns for the 2023 taxation year are due by March 31, 2024.
Bare trusts have NO tax payable.
However, failure to comply with this new filing requirement may lead to significant penalties, which is the greater of $2,500 or 5% of the maximum value of the property held by the trust, for each late filing.

What is a Bare Trust?

A situation where one party (Trustee) holds the legal title of an asset or property for the benefit of another party or parties (Beneficiaries).
The trustee only holds the legal title (or part of the legal title)
The beneficiaries retains full beneficial ownership, and any income or gains from the trust property go to the beneficiaries.

Common Bare Trust Scenarios, including but not limited to the following:

Shareholders hold the legal title of the investment properties for the benefit of their corporations
Child added as joint owners of their parents' bank or investment account
Child added as joint owners on the title of their parents' home
Parents added to the title of child's home for the purpose of mortgage qualification

What do you need to do?

Assess your situation to see if you are currently caught under a Bare Trust situation
Identify the trustees, the beneficiaries and the trust properties

How can we help?

We offer bare trust T3 reporting services. If you need assitance with the T3 return filing, pleaes do not hesitate to contact our office.

Bare Trust T3 Reporting