On December 15, 2022, the government passed Bill C-32 bringing into effect new trust reporting rules that apply to trusts with tax years ending December 31, 2023. Included in these new rules are the reporting requirements for Bare Trusts. The new disclosure rules apply to trust-like relationships whereby a person holding legal title to an asset differs from the beneficial owner, commonly known as a bare trust. To learn more about this new rule, read our earlier blog on this topic – Bare Trust Tax Reporting Requirements for Calendar 2023.

On March 28, 2024, the Canada Revenue Agency (CRA) announced that it “will not require bare trusts to file a T3 Income Tax and Information Return (T3 return), including Schedule 15 (Beneficial Ownership Information of a Trust), for the 2023 tax year, unless the CRA makes a direct request for these filings.”

Over the coming months, the CRA will work with the Department of Finance to further clarify its guidance on this filing requirement. The CRA will communicate with Canadians as further information becomes available. Read more here.

What does this mean for bare trusts for the 2023 tax year?

For taxpayers who are holding assets in a bare trust arrangement, a 2023 T3 return (previously due on April 2, 2024) will no longer need to be filed to report information about the bare trust. Prior to 2023, bare trusts were not required to file a T3 return. Bare trusts are now required to file a T3 return in order to report the information required under the Expanded Trust Reporting Rules.

For further information on the new trust reporting rules, please contact DM Tax Accountants in Surrey, BC for comprehensive advice and assistance.