Trust reporting requirements: where things stand

For tax years ending after December 30, 2023, most express trusts resident in Canada must file an annual T3 return, including Schedule 15 (Beneficial Ownership Information), even if the trust has no income or tax payable. Schedule 15 asks for the name, address, date of birth, jurisdiction of residence and tax identification number of every trustee, settlor, beneficiary and controlling person.

Common exceptions

• Trusts in existence for less than three months
• Trusts holding assets of $50,000 or less throughout the year, limited to cash, government debt and listed securities
• Registered plans, graduated rate estates, qualified disability trusts and mutual fund trusts
• Trusts governed by registered charities or not-for-profit organizations

Bare trusts

The CRA did not require bare trusts to file for the 2023, 2024 and 2025 tax years unless it asked for a return. Draft legislation would require certain bare trusts to file for tax years ending on or after December 31, 2026, with new exemptions expected to cover many ordinary family arrangements.

Deadlines and penalties

A T3 return is due 90 days after the trust's year end, which is March 31 for most trusts. Late filing costs $25 per day (minimum $100, maximum $2,500). Where a failure is made knowingly or through gross negligence, an additional penalty of 5% of the highest value of the trust's property in the year may apply.

Planning considerations

Trust reporting obligations should be assessed based on the legal and beneficial ownership of property, the nature of the trust arrangement, and the applicable legislative requirements and exceptions.

Particular attention should be given to family arrangements involving joint ownership of real estate, nominee corporations, property held for adult children, and informal arrangements where legal ownership differs from beneficial ownership.

The absence of a formal trust agreement does not necessarily mean that no trust relationship exists. Equally, not every arrangement involving different legal and beneficial owners creates a reporting obligation.

Trustees and beneficial owners should review existing arrangements, confirm whether a filing obligation arises, and maintain appropriate supporting documentation. This review is particularly important where ownership arrangements have evolved over time without corresponding legal documentation.

If you are a trustee, or hold property for someone else, now is a good time to confirm whether you will need to file for 2026.