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Trusts are prevalent in our society and in the past have often been overlooked. Some common examples of trusts are:
- A person or corporation holds legal title to a property “in trust” for another corporation. This is usually done to save property transfer tax or simplify the purchase of an asset such as a vehicle.
- Parent is on title for adult’s child home as a requirement of the mortgage.
- Parent puts their adult child’s name on title to real estate and/or bank/investment accounts for estate administration and probate planning purposes.
- Parent holds bank/investment account “in trust” for a child who may or may not still be a minor (RESP accounts are excluded).
Many of these trusts are now required to file an annual T3 trust income tax and information return due 90 days after the end of the year. With a leap year coming, the filing deadline for 2023 returns will be March 30, 2024.
Additional disclosure relating to the parties involved in the trust relationship will now be required as well. The additional items to be disclosed for all parties involved are the:
- Name
- Address
- Social insurance number or business number
- Birthday (if individual)
- Country of tax residency
The penalties for non-compliance are quite high. The late filing penalty is a maximum of $2,500. If the failure to file occurred knowingly or under gross negligence the penalty is the greater of $2,500 and 5% of the highest market value of the trust property.
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