Regulation 204.2

Regarding whether a trust other than a graduated rate estate (GRE) that was wound up in 2023 before December 31 would be required to provide the additional beneficial ownership information on Sched. 15 pursuant to Reg. 204.2(1) with its 2023 T3 return, CRA first noted that such reporting under Reg. 204.2(1) was applicable for taxation years ending on or after December 31, 2023. It then indicated that where such trust was wound up and the final distribution of the assets occurred, there is no provision that would cause its taxation year to be a period other than a calendar year, as required under s. 249.1(1)(c).

Accordingly, although wound up before December 31, 2023, it would have a taxation year ending on December 31, 2023, so it would be required to provide the Schedule 15 information with its 2023 T3 return.

CRA concluded that an RRSP trust, which does not have a tax identification number (TIN), and is the beneficiary of a unit trust, is now required to get one.

CRA noted that, by virtue of s. 150(1.2) ITA and Reg. 204.2, the unit trust was required, for taxation years ending after December 30, 2023, to file a Schedule 15 with its T3 returns disclosing, inter alia, each beneficiary and that beneficiary’s “TIN” which, in the case of a trust, was its trust account number (TAN).

Furthermore, s. 237(1.1)(b) provided that a person was required to provide its “designated number” (i.e., per s. 237(1.2)(b), its TAN, if a trust) to another person at that person's request if that person was required to make an information return that required that designated number. Accordingly, the RRSP trust, as a beneficiary of the unit trust, was required to provide its TAN to the unit trust upon the request of the unit trust.

CRA concluded from this that, should the RRSP Trust not have a TAN, it should request one from CRA. In other words, the requirement on the RRSP trust to provide its TAN to the unit trust implied that it was required to get one.

For taxation years ending on or after December 31, 2023, Reg. 204.2(1) requires a trust to provide specified information regarding its trustees and beneficiaries on its T3 return provided that it is not a trust coming within one of the exceptions described in ITA ss. 150(1.2)(a) to (o) (e.g., under para. (a), a trust which on December 31 of the year in question had been in existence for less than three months). However, the preamble to s. 150(1.2) I.T.A. provides that s. 150(1.2) can only apply to a resident trust that is an express trust, or for civil law purposes, a trust other than a trust that is established by law or by judgment. Must a trust that does not come within the preamble to s. 150(1.2) (for example, a Quebec trust that is established by law or by judgment), but that is not described in any of ss. 150(1.2)(a) to (o), provide the information set out in Reg. 204.2(1)?

CRA indicated that such a (non-preamble) trust must provide such additional information provided that it was otherwise required to file a return under ss. 150(1) and (1.1) without regard to s. 150(1.2) (e.g., a trust with tax payable for the year).

Pursuant to Reg. 204.2(1)(a), a trustee of a trust is required to report information about each “beneficiary” of the trust, unless the trust is subject to one of the exceptions in s. 150(1.2) or an exception in s. 204.2(2) applies. CRA was asked to comment on the meaning of “beneficiary” in the context of a query about a “disaster clause” for a family trust providing that in the event that none of the parents and their issue survived, the assets of the trust are to go to extended family members (“contingent beneficiaries”). CRA indicated that, very generally, a beneficiary of a trust is a person, other than the protector, who has the right to compel the trustee to properly enforce the terms of the trust, regardless of whether that person’s right to the income or capital of the trust is immediate, future, contingent, absolute or conditional on the exercise of the discretion of any person – so that, accordingly, a beneficiary in the ordinary sense would include a beneficiary whose interest is contingent.

CRA also noted that, under Reg. 204.2(2), where the person’s identity is not known or ascertainable, then sufficiently detailed information is required to be included in the return so that it can be determined with certainty whether a particular person is a beneficiary of the trust.