If the trust is required to provide beneficial ownership information, the Schedule 15 form must list the name, date of birth, address and social insurance number of all trustees, settlors, beneficiaries and controlling persons to the CRA.
Do bare trusts need to file a 2024 tax return?
Draft legislation was released in August with a consultation period ending on September 11, 2024.
Assuming the legislation is passed, bare trusts will again be exempt from filing T3 returns for the 2024 tax year. Presumably, this is to allow another year to raise awareness of the rules among Canadians and hopefully get things right going forward.
What are the rules for future years?
If the legislation passes as proposed, bare trusts that have less than $50,000 of assets during the year, regardless of the type of assets, will be exempt from filing.
If all parties to a bare trust are related, that limit rises to $250,000, depending on the assets. So long as the assets are cash, guaranteed investment certificates (GICs), stocks, bonds, mutual funds or exchange traded funds (ETFs), this higher limit applies.
Notably absent from this list of assets is real estate. But a full exemption applies for real estate that would be the principal residence of one of the related legal owners.
Bare trusts for 2024 and beyond
The bare trust tax filing rules have been confusing to say the least. But the good news is that fewer trusts should be required to file for 2024 and future years.
You can speak to your accountant about how the new rules impact you. If you file your own personal tax return, you can consider getting professional help for your trust filing even if you continue a do-it-yourself approach for your other tax returns.
1) A husband and wife have a joint chequing account and a joint savings account at the same financial institution. Would these accounts fall under the Bare Trust rules? Is the $250,000 limitation for each joint account or is it cumulative for all joint accounts that the husband and wife have together?
2) The same husband and wife each have their own margin accounts with their respective spouse’s name on the account for estate planning purposes. These margin accounts are at a different financial institution than the chequing and saving accounts. How does the $250,000 limitation apply in the 2nd situation?
Due to the large volume of comments we receive, we regret that we are unable to respond directly to each one. We invite you to email your question to [email protected], where it will be considered for a future response by one of our expert columnists. For personal advice, we suggest consulting with your financial institution or a qualified advisor.