Updated 06Oct22

As a part of the 2018 federal budget, the Canadian government introduced new trust tax return and information reporting requirements for express trusts (see footnote 1) and non-resident trusts. In 2021 it was announced the application of these new rules would be delayed by a year, applying to certain trusts with taxation years ending on or after December 31, 2022.  The new rules create a T3 “Trust Income Tax and Information Return” filing obligation for certain trusts that do not currently have a filing requirement, such as Bare Trusts. Trustees should be aware of these reporting changes as there could be substantial penalties for non-compliance.

Trusts:  Information Reporting Effective for 2022 and Subsequent Taxation Years

For taxation years ending on or after December 31, 2022, the new reporting will require express trusts and non-resident trusts to file a T3 return and list details of certain information (see below) for any reportable entities. Reportable entities include each settlor, trustee, beneficiary, and any person who the trust assigns influence over trustee decisions regarding appointment of income or capital of the trust (such as a trust protector (see footnote 2)). Note that the settlor would include the legal settlor and any person transferring property to the trust. A reportable entity can be a person, a trust, corporation, or other entity and includes entities that qualify as reportable for only part of the year. Reportable entities must provide their:

  1. Full name
  2. Type and classification of entity (ex. Individual or Corporation)
  3. Mailing address
  4. Date of birth (if individual)
  5. Jurisdiction of residence and
  6. Taxpayer identification number such as Social Insurance Number, trust account number, business number or foreign tax identification number.

The above information for each reportable entity must be completed and filed with the T3 return on the new Schedule 15 “Beneficial Ownership Information of a Trust”. Even if the trust has no income, the trust will have to report the additional information by filing the new schedule along with the T3 return.  This information must be filed with the T3 trust return and cannot be filed separately. The identifying information must be provided for any trustee or beneficiary even if they only hold that role for a part of the taxation year.

Exemptions to the New Filing Requirements

The following trusts are exempt from the new filing requirements:

  • Non-express trusts (see footnote 1);
  • Trusts that have existed for less than 3 months;
  • Trusts that hold less than $50,000 in assets throughout the taxation year provided their holdings are confined to deposits, government debt obligations and listed securities (see footnote 3);
  • Trusts governed by registered plans such as RRSPs, TFSAs and RESPs;
  • Graduate Rate Estates and Qualified Disability Trusts (QDTs);
  • Mutual fund trusts, segregated funds and master trusts;
  • Lawyers’ general trust accounts;
  • Trusts that qualify as non-profit or registered charities;
  • Trusts where all the units of which are listed on a designated stock exchange (new);
  • Trusts under an employee profit sharing plan (new);
  • Trusts under a registered supplementary unemployment insurance benefit plan (new); and
  • Trust set up under the First Home Savings Account plan (new).

Changes from New Draft Legislation February 4, 2022 and August 9, 2022

Amendments to the original 2018 draft legislation include adding to the list of trusts exempt from the information filing requirement. The exemptions #9-12 above were added based on feedback and new programs rolled out by the government.

Bare Trust Arrangements Caught in Amended Draft Legislation

As part of new draft legislation, subsection 150(1.3) of the Income Tax Act (“the Act”) was proposed which would subject bare trust agreements to the aforementioned trust filing requirements. The Act defines a Bare Trust as 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.

The most frequent use of bare trusts is to hold legal title of real estate (residential or commercial), in trust for a beneficiary. The legal and beneficial interest in the real estate is separated between the trustee and beneficiary. Trustees in a bare trust take no part in the active management of the trust property, instead relying on instructions from the beneficiaries of the bare trust. One benefit of the bare trust in BC is for beneficial ownership of real estate to change hands without legal title changing avoiding property transfer tax.

This information must be collected for the first taxation year of the trust on or after December 31, 2022. For subsequent taxation years, only modifications to the information provided previously will need to be reported.

Non-Compliance to Additional Reporting Requirements

Trusts which fail to file the T3 return with the new reporting requirements will be issued a non-compliance penalty equal to $25 per day (minimum $100) up to a maximum $2,500.  Gross negligence penalties from a minimum $2,500 up to 5% of the fair market value of the property held in the trust may also apply if statements on the return are knowingly or negligently false.

Where the identity of a beneficiary cannot be determined, steps must be taken to provide CRA with detailed information obtained while investigating whether an individual is a beneficiary of the trust.

Tax and Estate Planning for 2022 Changes

Where the settlor of an inter-vivos trust does not wish for beneficiaries of the trust to be known prior to their death, consideration should be made as to whether a Will naming direct beneficial ownership after their passing would be more appropriate than to hold a trust as a Will substitute where additional reporting will be required annually.

Trustees should be aware of these changes to the filing requirements as the liability for income tax and information reporting (and thus non-compliance penalties) rests with those acting in this fiduciary capacity.

Where all trust assets have been disposed of and distributed, the trustee is required to windup the trust.  Trustees should review the intention on original creation of the trust to see if the trust still serves a beneficial purpose under the new filing and reporting rules.

Next Steps

The largest impact of the proposed changes will be on bare trust agreements which produce no income but are now required to file T3 income tax returns and the new Schedule 15 information reporting.

For any current or future clients of Cameron Izard Snell, it’s the responsibility of the trustee (or agent) to notify us of any bare trust arrangements that may be subject of the new T3 filing requirement. We do not retain historical information regarding bare trust agreements where the trust has not previously had an income tax filing requirement.

If you have any questions regarding these upcoming changes affecting express trusts or are seeking any trust or estate planning advice, please contact your advisor at Cameron Izard Snell LLP to assist you.

The reporting requirements discussed, and advice thereon are based on current tax laws and does not constitute legal advice. Dissolving a bare trust agreement could potentially result in the application of BC’s property transfer tax. A lawyer should be consulted prior to dissolving any bare trust agreements or adding or removing any trustees or beneficiaries to understand the full implications of action.


  • An express trust is generally a trust created with the settlor’s express intent, usually made in writing (as opposed to a resulting or constructive trust, or certain trusts deemed to arise under the intervention of a court). For this reason most trusts are express trusts. The opposite is referred to as an implied trust where the court is trying to right a wrong or clear up a misunderstanding. To avoid an implied trust, the settlor should create documents that clearly express the planner’s wishes to avoid the courts.
  • A trust protector is a person appointed under the trust instrument to direct, guide or even restrain the trustees in relation to their administration of the trust.
  • Note that this exclusion does not apply if any time in the taxation year the value of assets exceeded $50,000 or the trust held property that is not deposits, government debt or listed securities. If this is the only exemption that applies to the trust, given the non-compliance penalties involved, you may decide to take the conservative approach and file on the assumption that the trust does not meet the excluded property exemption.



This publication contains information in summary form, current as of the date of publication, and is intended for general guidance only.  It should not be regarded as comprehensive or a substitute for personal advice.  Before taking any particular course of action, contact Cameron Izard Snell or another professional advisor to discuss these matters in the context of your particular circumstances.  We accept no responsibility for any loss or damage occasioned by your reliance on information contained in this publication.