Tax returns for Family Trusts
If you have a family trust with no activity, you may not have been filing an income tax return (called a “T3”), as it has not generally been a requirement in the absence of income flowing through the trust. Starting with taxation years ending on or after December 31, 2021, however, most trusts will be required to file an income tax return whether or not there is any activity or income in the trust.
The legislative changes introducing the obligation to file a return, also increases trust reporting obligations. Starting in 2021, each trust will have to report the identity of the trustees, beneficiaries, settlors and any person that can exert control over decisions of the trust. The information required for these parties includes their name, address, date of birth, jurisdiction of residence and social insurance number.
Penalties will be imposed for trusts that do not comply with these new requirements.
If you have any questions about your family trust, please contact us.
This blog post is intended to provide general information and does not constitute legal advice. You should consult a lawyer for advice regarding your individual situation.
Every effort has been made to ensure the contents of the blog post were accurate as of the date it was written, however, the law can change and we cannot guarantee that the information remains accurate. In addition, because the comments above are of a general nature, they may not apply for every situation. If you have questions, please contact us and we would be happy to discuss your individual circumstances, and whether there have been any changes to the law that would affect the information presented.