New Reporting Requirements for Trusts
New tax reporting requirements for certain trusts will come into effect for the 2021 taxation year ending on December 31.
As a result, most trusts must now file a Canadian tax return even if there was little or no activity. Penalties for late filing are $25/day up to a maximum of $2,500. There are also much more substantial penalties in situations where a trust makes a false statement or simply disregards the new filing requirements.
Furthermore, most trusts will now be required to report the name, address, date of birth and social insurance number for the Settlors, Trustees and Beneficiaries.
If you are a trustee of a trust, we recommend you start gathering this information now so it’s available in time to file the tax return on March 31, 2022.
Please contact us at your convenience if you have any questions regarding these new reporting requirements.