Trust Reporting laws are changing for 2021
Trust reporting requirements will be greatly expanded for taxation years ending on or after December 31, 2021, and now is the best possible time to be acquainted with them! We can help you to understand the new requirements, and how to meet them.
- T3 Filing Requirement
Under the new legislation, an annual T3 income tax return is expected to be filed in almost all circumstances, not just if tax is payable by the trust or if capital property has been disposed. However, if the trust has been in existence for less than three months as of the year-end, or is the liquid assets have an aggregate fair market value of less than $50,000, then the requirement to file an annual return continues to be waived.
In addition, the following trusts which are specifically exempted from the filing obligation are as follows:
- General trust accounts managed by lawyers
- Not-for-profit trusts
- Registered charity trusts
- Mutual fund trusts
- Segregated fund trusts
- Master trusts
- Qualified disability trusts
- Employee life trusts
- Employee health trusts
- Government-funded trusts
- Graduated rate estates
- Cemetery care trusts
Requirements for Additional information
Under the new rules, the T3 returns filed by trusts must contain all of the following information for each trustee, beneficiary, and settlor:
- Date of Birth
- Jurisdiction of Residence
- Taxpayer Identification Number – either the Social Insurance Number, the Business Number, the Trust Account Number, or the relevant foreign ID number.
In addition, the same information must be provided for any person with he ability to influence trustee decisions regarding income or capital appointments.
Penalties for Noncompliance
In addition to the already-existing penalties, any false statement, omission, or failure to file a return could result in a penalty of the greater of $2,500 and 5% of the peak fair market value of the trust assets over the course of the tax year.
You should assemble of the required information of all concerned parties as soon as possible.
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