Canada's trust reporting rules now reach arrangements that most people would never have called a trust: a parent on title to help a child qualify for a mortgage, a bank account held for someone else, a property held by one person for another. If an arrangement like that exists, there may be a filing obligation attached to it.
We work out whether a trust return is required, prepare and file it, and tell you what the trust's own tax position is.
What this includes
- Working out whether an arrangement has a filing obligation at all
- The T3 return, the schedules, and the beneficial ownership information the rules now ask for
- T3 slips for beneficiaries
- Returns for a trust's first year, and for the year it is wound up
- Estates administered after a death, including the final personal return
- Catching up trust filings that were missed in earlier years
Bare trusts are the ones people miss
A bare trust is an arrangement where one person holds legal title and another has the real interest. Joint ownership between spouses is usually not one. A parent added to a child's title purely to satisfy a lender often is. The distinction decides whether anything has to be filed, and it is worth settling before a deadline rather than after.
The deadline
A T3 return is generally due 90 days after the trust's tax year end, which for most trusts means 31 December and a filing date at the end of March. That is a short window, and the information the rules now require takes longer to gather than the return takes to prepare.
Estates
When someone dies there is usually a final personal return and, after that, a trust return for the estate while it is being administered. We prepare both, and work with the executor through the clearance process. See also estate and succession planning.
Questions we are asked about this
When is a T3 trust return due?
A T3 return is generally due 90 days after the end of the trust's tax year. Most trusts have a 31 December year end, which puts the filing deadline at the end of March.
Is a jointly owned home a bare trust?
Usually not. A home owned jointly by spouses is normally held as joint tenants or tenants in common, which are ownership structures rather than trusts. A bare trust is where one person holds legal title for someone else who has the real interest — a parent added to title only to help a child get a mortgage is the common example.
What happens if a trust return was never filed?
File it. Penalties for late trust filings can be significant, and they grow. Where there is a case for relief we make it, and the CRA's voluntary disclosure route is sometimes available when you come forward first.
Worth reading
Where we work
We are based in Scarborough and act for clients across Toronto and the GTA in person — see accountant in Scarborough and small business accountant in Toronto — and everywhere else in Canada by email and video call.
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Corporate Tax Returns (T2) · Personal Tax Returns (T1) · HST and GST Filing · Bookkeeping · Payroll · CRA Audits and Disputes · Financial Statements · Tax Planning · Incorporation and Business Setup · Estate and Succession Planning · Cross-Border Tax
Our office
ClearWealth Accounting Advisors
1457 McCowan Rd, Suite 202
Toronto, Ontario M1S 5K7
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Open Monday to Friday, 9 a.m. to 6 p.m.
Phone: (437) 290-5117
Email: info@clearwealth.tax
