CRA covers additional points in its FAQ on the trust-reporting rules

CRA has revised its FAQ on the new trust reporting rules. Changes include:

• CRA has added a detailed description of what constitutes a trust under the common law (e.g. referring to the “three certainties”) or under the Civil Code. CRA states that “a person who is required to manage and dispose of trust property and who can exercise independent discretionary power over the property is a trustee rather than an agent” and that the “trustee of a bare trust, in contrast, acts as an agent for the beneficiaries when dealing with trust property.”
• Unlike the accommodation by the rules for beneficiaries who are not known or ascertainable with reasonable effort, CRA notes that the Regulations “do not include a relieving provision where the person making the return does not know the identity of a particular reportable entity” (other than a beneficiary).
• It indicates that the s. 163(5) gross negligence penalty could be imposed for failure to file a return rather than only in relation to a false statement or omission in a return that had been filed.
• Regarding the inclusion in listed (i.e., disclosure-exempted) trusts for a trust that was in existence for less than three months at the end of the taxation year, CRA states that this requirement is satisfied by a trust that ceased to exist during the particular taxation year at a date which was less than three months after it was created, and by a trust that was created less than three months before the end of the taxation year.

Neal Armstrong. Summaries of additions to CRA Webpage, Enhanced reporting rules for trusts and bare trusts: Frequently asked questions, updated on 14 March 2025 under s. 104(1), Reg. 204.2(1), s. 163(5) and s. 150(1.2)(a).