Rules for tax years ending on or after December 31, 2023

For tax years ending on or after December 31, 2023, additional rules apply in respect of the requirement to file a trust return. A trust return must be filed if either A or B applies.

1. The trust is an express trust (or for civil law purposes a trust other than a trust that is established by law or by judgement) which is resident in Canada and it is not a listed trust.

   Note: This determination must also be applied to a trust deemed resident in Canada under subsection 94(3).

2. Income from the trust property is subject to tax, and:

   • the trust is an express trust (or for civil law purposes a trust other than a trust that is established by law or by judgement) resident in Canada and is a listed trust, or
   • the trust is not an express trust (or for civil law purposes a trust other than a trust that is established by law or by judgement) resident in Canada.

   Note: The above two bullets represent all other trusts (resident and non-resident) not described in A above.

and in the year, the trust:

• has tax payable
• is requested to file
• is resident in Canada and has either disposed of, or is deemed to have disposed of, a capital property or has a taxable capital gain (for example, a principal residence, or shares)
• is a non-resident throughout the year, and has a taxable capital gain (other than from an excluded disposition described in subsection 150(5)) or has disposed of taxable Canadian property (other than from an excluded disposition)
• is a deemed resident trust
• holds property that is subject to subsection 75(2) of the Act
• has provided a benefit of more than $100 to a beneficiary for the upkeep, maintenance, or taxes on a property maintained for the beneficiary's use (for more information, see Line 22 – Upkeep, maintenance, and taxes of a property used or occupied by a beneficiary in Chapter 3 of Guide T4013, T3 Trust Guide), or
• receives from the trust property any income, gain, or profit from the trust property that is allocated to one or more beneficiaries and the trust has:
  • total income from all sources of more than $500
  • Income of more than $100 allocated to any single beneficiary
  • made a distribution of capital to one or more beneficiaries
  • allocated any portion of the income to a non-resident beneficiary

Note:

For purposes of the requirement to file a trust return, this includes an arrangement under which the trust can reasonably be considered to act as agent for all the beneficiaries under the trust with respect to all dealings with all of the trust’s property. These arrangements are generally known as “bare trusts”. See also What to file – Instructions for bare trusts.

Where a trust is required to file for the first time, it will need to have a trust account number before being able to file a trust return electronically. For more information on how to obtain a trust account number, see “Trust account number”.

Listed trusts

The following are listed trusts:

• a trust that has been in existence for less than three months at the end of the year
• a trust that only holds certain types of assets with a fair market value that does not exceed $50,000 throughout the taxation year
• a trust that is required under the relevant rules of professional conduct or the laws of Canada or a province to hold funds for the purposes of the activity that is regulated under those rules or laws, provided it is not maintained as a separate trust for a particular client or clients (this provides an exception for a lawyer’s general trust account, but not for specific client accounts)
• a trust that qualifies as a non-profit organization described in paragraph 149(1)(l) of the Act or a registered charity
• a mutual fund trust
• a related segregated fund trust, as defined in paragraph 138.1(1)(a) of the Act
• a trust, all the units of which are listed on a designated stock exchange
• a prescribed master trust
• a graduated rate estate
• a qualified disability trust
• an employee life and health trust
• a trust described under paragraph 81(1)(g.3) of the Act
• a trust under or governed by:
  • a deferred profit sharing plan
  • a pooled registered pension plan
  • a registered disability savings plan
  • a registered education savings plan
  • a registered pension plan
  • a registered retirement income fund
  • a registered retirement savings plan
  • a tax-free savings account
  • an employee profit sharing plan
  • a registered supplementary unemployment benefit plan
  • a first home savings account
• a cemetery care trust, or a trust governed by an eligible funeral arrangement

When must beneficial ownership information be submitted

A trust (other than a listed trust) that is required to file a trust return, generally must report beneficial ownership information on Schedule 15. This reporting requirement also applies in respect of a trust that is a bare trust.

For more information about Schedule 15, see “Schedule 15 – Beneficial Ownership Information of a Trust”.

The new trust reporting requirements do not require the disclosure of information that is subject to solicitor-client privilege.

Although a listed trust may not be required to complete a Schedule 15, the trust may still be required to file a trust return.

Rules for tax years ending before December 31, 2023.

You have to file a trust return if income from the trust property is subject to tax, and in the tax year, the trust:

• has tax payable
• is requested to file
• is resident in Canada and has either disposed of, or is deemed to have disposed of, a capital property or has a taxable capital gain (for example, a principal residence, or shares)
• is a non-resident throughout the year, and has a taxable capital gain (other than from an excluded disposition described in subsection 150(5)) or has disposed of taxable Canadian property (other than from an excluded disposition)
• is a deemed resident trust
• holds property that is subject to subsection 75(2) of the Act
• has provided a benefit of more than $100 to a beneficiary for upkeep, maintenance, or taxes for property maintained for the beneficiary’s use (for more information, see “Line 22 – Upkeep, maintenance, and taxes of a property used or occupied by a beneficiary”), or
• receives from the trust property any income, gain, or profit that is allocated to one or more beneficiaries, and the trust has:
  • total income from all sources of more than $500
  • income of more than $100 allocated to any single beneficiary
  • made a distribution of capital to one or more beneficiaries, or
  • allocated any portion of the income to a non-resident beneficiary

You may not have to file a trust return if the estate is distributed immediately after the person dies, or if the estate did not earn income before the distribution. In these cases, you should give each beneficiary a statement showing their share of the estate.

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