In a recent blog, we detailed the government’s proposed new trust reporting rules that were due to come into effect in 2021, before being pushed back until later this year. Now, the implementation date of those new reporting requirements has been delayed yet again.
To recap, in the 2018 federal budget, Ottawa outlined plans that would require ‘all non-resident trusts to provide additional beneficial ownership information alongside the T3 returns they are currently required to file (assuming the trust has taxable income, capital gains or has made sales of capital property in the applicable tax year).’ Express trusts resident in Canada would also fall under the new reporting regime.
The good news for affected taxpayers is that the new coming into force date of the trust reporting rules will now apply to trust taxation years ending after December 30, 2023. See our recent blog for a full outline of the new requirements, including exemptions.
While the implementation delay is a welcome development, these relatively burdensome rules will eventually come into effect. Penalties for failing to provide the necessary trust information to the Canada Revenue Agency—or for T3 filing non-compliance—are significant. Take the time now to work with your Chartered Professional Accountant and/or lawyer to fully understand your trust holdings, then compile all necessary information to meet applicable filing deadlines. Doing so will help to mitigate costs associated with ongoing trust compliance and non-compliance penalties.
Armando Iannuzzi, Co-Managing Partner
For more information on new trust compliance rules, contact a member of our team.