Provide your Input by September 30, 2022
In 2018, the Federal Government announced proposed legislation that expanded trust disclosure reporting in the Income Tax Act. They are now moving forward with consultations to advance this legislation as outlined in the 2022 Federal Budget.
These new disclosure requirements include:
- Trusts that reside in Canada must file a T3 Trust Income Tax
return annually, even if they have:
- no income tax liability,
- no trust distributions, and/or
- no trust allocations in the tax year;
- The T3 Trust Income Tax return must include disclosure of the settlor(s), the trustee(s), and all beneficiaries of the trust; and
- Information for each settlor, trustee, and beneficiary must include name, address, date of birth, jurisdiction of residence, and social insurance number or business number.
The Department of Finance has listed the following exception to the proposed legislation, being:
"in respect of a trust, the beneficiaries of which are all of the members of an Indigenous group, community or people that holds rights recognized and affirmed by section 35 of The Constitution Act, 1982, or an identifiable class of the members of an Indigenous group, community or people that holds rights recognized and affirmed by section 35 of The Constitution Act, 1982, the person making the return provides a sufficiently detailed description of the class of beneficiaries to determine with certainty whether any particular person is a member of that class of beneficiaries"
Indigenous Trusts are encouraged to participate in the consultation process by contacting the Canada Revenue Agency and the Department of Finance who are accepting comments from Canadians on the proposed legislation changes until September 30, 2022.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.