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Understanding the New Trust Reporting Requirements: A Guide for Family-Owned Enterprises

As of the taxation year ending after December 30, 2023, Canada’s tax landscape for trusts has undergone significant changes. These modifications, mandated by the Canada Revenue Agency (CRA), affect both the filing of the T3 Trust Income Tax and Information Return (T3 Return) and the disclosure of beneficial ownership details. In this blog, we’ll break down these new requirements and how they impact family-owned businesses.

Key Changes to Trust Reporting

  1. Mandatory Filing for All Trusts: Except for those meeting specific conditions, all trusts are now required to file an annual T3 Return. This includes bare trusts, which previously may not have had this obligation.
  2. Additional Reporting on Schedule 15: Trusts filing a T3 Return must complete Schedule 15 to report beneficial ownership information. This schedule asks for detailed information on trustees, settlors, beneficiaries, and controlling persons associated with the trust.
  3. Requirements for First-Time Filers: Trusts filing for the first time need a trust account number, which can be obtained via the CRA’s website.
  4. Penalties for Non-Compliance: Failure to file a T3 Return, including Schedule 15 where required, can result in significant penalties.

Implications for Family-Owned Businesses

Family-owned businesses often use trusts for estate planning, tax optimization, and asset protection. These new reporting requirements mean that family trusts, which may not have filed T3 Returns in the past, will likely need to do so now. The additional information required on Schedule 15 also means that trusts will need to maintain more detailed records of their beneficiaries and trustees.

Tips for Compliance

  1. Review Your Trust Structure: Assess whether your family-owned business’s trust falls under the new filing requirements.
  2. Gather Necessary Information: Compile the detailed information required for Schedule 15, including names, addresses, dates of birth, country of residence, and tax identification numbers for all reportable entities.
  3. Stay Updated: Keep abreast of any further updates from the CRA regarding trust reporting or talk to Shajani CPA.

How Shajani CPA Can Help

Navigating these new trust reporting requirements can be challenging, especially for family-owned businesses with complex structures. Shajani CPA, a team of experienced CPAs and Tax Law experts, is well-equipped to guide you through these changes. We offer personalized services to ensure that your trust complies with the new requirements while continuing to serve your business’s and family’s needs effectively.

Connect with us to simplify your trust reporting process and stay compliant with the latest tax regulations.

For more information see New Trust Reporting Requirements for T3 Returns, or schedule a meeting with the tax professionals at Shajani CPA.

This information is for discussion purposes only and should not be considered professional advice. There is no guarantee or warrant of information on this site and it should be noted that rules and laws change regularly. You should consult a professional before considering implementing or taking any action based on information on this site. Call our team for a consultation before taking any action. ©2023 Shajani CPA.

Shajani CPA is a CPA Calgary, Edmonton and Red Deer firm and provides Accountant, Bookkeeping, Tax Advice and Tax Planning services.

Nizam Shajani, Partner, LLM, CPA, CA, TEP, MBA

I enjoy formulating plans that help my clients meet their objectives. It's this sense of pride in service that facilitates client success which forms the culture of Shajani CPA.

Shajani Professional Accountants has offices in Calgary, Edmonton and Red Deer, Alberta. We’re here to support you in all of your personal and business tax and other accounting needs.