The Joint Committee recommends that the draft bare trust reporting requirement be scrapped

The Joint Committee noted that the required filing under draft s. 150(1.3) of returns for bare trusts will be burdensome including identifying whether a name can be assigned to the arrangement (when none may exist), identifying how to respond to requests for information which may be inapplicable, the need (in the case of a paid preparer) to get a client to sign and return a T183 form and perhaps also obtain a client engagement letter – for perhaps not much benefit (the required reporting will not provide any meaningful information regarding the trust property).

It is recommended that proposed s. 150(1.3) not be enacted and that beneficial ownership information be obtained some other way – for instance, requiring the beneficial owners, when they file tax returns of their own, to provide beneficial ownership information respecting the bare trust arrangements on those returns would be more efficient.

If the answer to this is “no,” then at least CRA might provide a streamlined T3 form specifically for bare trust arrangements, addressing only the Reg. 204.2 information.

Also linked on our Joint Committee page are the Joint Committee submissions on reportable and notifiable transactions and on the tax debt avoidance rules in the February 4, 2022 draft legislation along with a CBA submission focused on privilege issues raised by the reportable and notifiable transactions, and a CPA Canada submission on the uncertain tax treatment rules contained in the same package.

Neal Armstrong. Summary of Joint Committee, "Reporting Requirements for Trusts", 5 April 2022 Joint Committee Submission under s. 150(1.3).