There are important updates regarding the filing requirements for bare trusts, which may impact your tax planning and compliance strategies.
Bare Trusts Exempt for 2024
For the 2024 tax year, bare trusts will continue to be exempt from filing T3 Trust Income Tax and Information Returns. This exemption provides a temporary relief for trustees and beneficiaries, allowing them to focus on other aspects of their financial planning without the immediate need to file T3 returns.
Changes Effective from 2025
Starting in the 2025 tax year, the filing requirements for bare trusts will change significantly. Bare trusts will be required to file T3 returns unless they meet specific exemptions. These exemptions include:
- Related Trustees and Beneficiaries: If all trustees and beneficiaries of the trust are related to each other, the trust may be exempt from filing.
- Fair Market Value Threshold: If the fair market value of the property held in the trust does not exceed $250,000, the trust may be exempt from filing.
- Asset Composition: If the trust’s assets consist solely of cash, Guaranteed Investment Certificates (GICs), mutual funds, personal-use property, and securities traded on a designated exchange, the trust may be exempt from filing.
Implications for Trustees and Beneficiaries
It is crucial for trustees and beneficiaries to understand these changes and prepare accordingly. The new filing requirements may necessitate additional record-keeping and reporting efforts. We recommend reviewing your current trust arrangements and consulting with our tax professionals to ensure compliance with the new regulations.
How We Can Help
Our team of experienced tax advisors is here to assist you in navigating these changes. We can help you determine whether your bare trust qualifies for any of the exemptions and guide you through the filing process if required. Our goal is to ensure that you remain compliant while optimizing your tax planning strategies.
Contact Us
If you have any questions or need further assistance, please do not hesitate to contact us. We are here to support you and provide the expertise you need to manage your tax obligations effectively.
Thank you for your continued trust in our services.
