The federal government is granting new exemptions to bare trust tax returns after suspending the requirement at the last minute earlier this year.
The Canada Revenue Agency (CRA) announced on Tuesday that Canadians with bare trusts No need to file T3 tax form for 2024 tax year.
A bare trust relationship is one in which a person known as the trustee has legal ownership of real estate or assets, but does not have beneficial ownership. In such a relationship, “the trustee cannot take any action without direction from the beneficiary, and the trustee’s only function is to maintain legal title to the property.” the law says. government definition.
The new tax requirements for trusts were introduced as part of the government’s autumn 2022 economic report and were due to come into force from the 2023 tax year. This means people with bare trusts have been told they need to submit their forms by April 2nd.
The new rules were aimed at targeting money laundering, terrorist financing, and tax avoidance. However, many Canadians with fairly simple trust relationships filed their documents in a hurry.
With just days left before the April 2 deadline, the CRA announced it is suspending the following requirements: Bear Trust due to “unintended consequences for Canadians”” That moratorium was to be extended through the current tax year.
Despite an 11-hour suspension in March, more than 40,000 Canadians have filed T3 tax forms this year. many people were paying There is a high tax filing fee to fill out the form. before the exemption was announced.
The last-minute suspension prompted Francois Boileau, Canada’s taxpayer ombudsman, to launch an investigation into the matter.
Mr. Boileau said Wednesday that he is pleased that the exemption from filing requirements for bare trusts will be expanded.
“Due to the unintended impact on Canadians, the CRA exempted Baer Trustee from its reporting requirements in 2023. The exemption should have been reinstated in 2024,” Boileau said in a statement. .
Some Canadians may still have to file T3 forms for bare trusts if directly requested by the CRA.
