Who should file ▲

Who should file ▲

The rules have changed in respect of the situations for which a T3 return must be filed, effective for trust tax years ending on or after December 31, 2023. Refer to the applicable section below that corresponds to the tax year of the trust to determine whether the trust must file a T3 return.

Rules for tax years ending on or after December 31, 2023

For tax years ending on or after December 31, 2023, additional rules apply in respect of the requirement to file a T3 return. A T3 return must be filed if either A or B applies.

1. The trust is an express trust (or for civil law purposes a trust other than a trust that is established by law or by judgement) which is resident in Canada and it is not a listed trust.

2. Income from the trust property is subject to tax, and:

• the trust is an express trust (or for civil law purposes a trust other than a trust that is established by law or by judgement) resident in Canada and is a listed trust, or

• the trust is not an express trust (or for civil law purposes a trust other than a trust that is established by law or by judgement) resident in Canada

  Note
  

  The above two bullets represent all other trusts (resident and non-resident) not described in A above.

and in the year, the trust:

• has tax payable

• is requested to file

• is resident in Canada and has either disposed of, or is deemed to have disposed of, a capital property or has a taxable capital gain (for example, a principal residence, or shares)

• is a non-resident throughout the year, and has a taxable capital gain (other than from an excluded disposition described in subsection 150(5)) or has disposed of taxable Canadian property (other than in an excluded disposition)

• is a deemed resident trust

• holds property that is subject to subsection 75(2) of the Act

• has provided a benefit of more than $100 to a beneficiary for upkeep, maintenance, or taxes for property maintained for the beneficiary's use (for more information, see "Line 24 - Upkeep, maintenance, and taxes of a property used or occupied by a beneficiary" on page 36), or

• receives from the trust property any income, gain, or profit that is allocated to one or more beneficiaries, and the trust has:

  • total income from all sources of more than $500

  • income of more than $100 allocated to any single beneficiary

  • made a distribution of capital to one or more beneficiaries, or

  • allocated any portion of the income to a non-resident beneficiary

  Note
  

  For purposes of the requirement to file a T3 return, a trust includes 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. These arrangements are generally known as "bare trusts." See the definition of bare trust in "Chart 1 - Types of Trusts" on page 17 and "What to file - Instructions for bare trusts" on page 30.

Where a trust is required to file for the first time, it will need to have a trust account number before being able to file a T3 return electronically. For more information on how to obtain a T3 account number, see "Trust account number" on page 19.

Listed Trusts

The following are listed trusts:

• a trust that has been in existence for less than three months at the end of the year

• a trust that only holds certain types of assets (described on page 28) with a fair market value that does not exceed $50,000 throughout the taxation year

• a trust that is required under the relevant rules of professional conduct or the laws of Canada or a province to hold funds for the purposes of the activity that is regulated under those rules or laws, provided it is not maintained as a separate trust for a particular client or clients. This provides an exception for a lawyer's general trust account, but not for specific client accounts

• a trust that qualifies as a non-profit organization described in paragraph 149(1)(l) of the Act or a registered charity

• a mutual fund trust

• a related segregated fund trust, as defined in paragraph 138.1(1)(a) of the Act

• a trust, all the units of which are listed on a designated stock exchange

• a prescribed master trust

• a graduated rate estate

• a qualified disability trust

• an employee life and health trust

• a trust described under paragraph 81(1)(g.3) of the Act

• a trust under or governed by:

  • a deferred profit sharing plan

  • a pooled registered pension plan

  • a registered disability savings plan

  • a registered education savings plan

  • a registered pension plan

  • a registered retirement income fund

  • a registered retirement savings plan

  • a tax-free savings account

  • an employee profit sharing plan

  • a registered supplementary unemployment benefit plan

  • a first home savings account

• a cemetery care trust, or a trust governed by an eligible funeral arrangement

• an "eligible trust" as defined in subsection 135.2(1) of the Act

When must beneficial ownership information be submitted

A trust (other than a listed trust) that is required to file a T3 return, generally must report beneficial ownership information on Schedule 15. This reporting requirement also applies in respect of a trust that is a bare trust; however, see "Bare trusts filing relief for 2023 and 2024" in "What's new for 2024" on page 3.

For more information about Schedule 15, see "Schedule 15 - Beneficial Ownership Information of a Trust" on page 72.

The new trust reporting requirements do not require the disclosure of information that is subject to solicitor-client privilege.

Although a listed trust may not be required to complete a Schedule 15, the trust may still be required to file a T3 return.

Rules for tax years ending before December 31, 2023.

You have to file a T3 return if income from the trust property is subject to tax, and in the tax year, the trust:

• has tax payable

• is requested to file

• is resident in Canada and has either disposed of, or is deemed to have disposed of, a capital property or has a taxable capital gain (for example, a principal residence, or shares)

• is a non-resident throughout the year, and has a taxable capital gain (other than from an excluded disposition described in subsection 150(5)) or has disposed of taxable Canadian property (other than from an excluded disposition)

• is a deemed resident trust

• holds property that is subject to subsection 75(2) of the Act

• has provided a benefit of more than $100 to a beneficiary for upkeep, maintenance, or taxes for property maintained for the beneficiary's use (for more information, see "Line 24 - Upkeep, maintenance, and taxes of a property used or occupied by a beneficiary" on page 36), or

• receives from the trust property any income, gain, or profit that is allocated to one or more beneficiaries, and the trust has:

  • total income from all sources of more than $500

  • income of more than $100 allocated to any single beneficiary

  • made a distribution of capital to one or more beneficiaries, or

  • allocated any portion of the income to a non-resident beneficiary

Examples

A T3 return must be filed when a trust does not have tax payable, however the trust holds property that is subject to subsection 75(2) and from which the trust received income, gains or profits during the year.

A T3 return must be filed when the trusts' total income from all sources is less than $500, however the trust made a distribution of capital to one or more beneficiaries.

Rental income or timber royalty from Canada

Rental income from real property in Canada or a timber royalty on a Canadian timber resource property is subject to a 25% withholding on the gross income under Part XIII, unless the rate is reduced by a reciprocal tax treaty.

A non-resident may file a separate T3 return pursuant to an election under section 216 in respect of its net rental or timber royalty income.

Indicate "Section 216" on the top of the first page of the T3 return. For more information, see IT393R2 - Election Re: Tax on Rents and Timber Royalties Non-Residents.

Trust account number

A trust account number is an alphanumeric identifier starting with the letter "T" and followed by an eight digit number. You must provide this identifier on every T3 return, trust-related information slip, and any correspondence related to the trust. See "Failure to provide the trust account number" below.

In order to file a T3 return electronically, a Trust account number needs to be requested prior to filing the return.

This application also applies to a non-resident trust electing to file an income tax return under section 216 of the Income Tax Act. For more information, see Guide T4144, Income Tax Guide for Electing Under Section 216.

If the residency status of a trust changes, after having been assigned a trust account number, the trust will continue to use the same trust account number.

If a trust, to which section 94 applies, is an electing trust with filing obligations under both its resident portion trust and its non-resident portion trust, these returns must be filed separately using two distinct trust account numbers.

Applying for a trust account number

A trustee can apply for a trust account number using the CRA's online trust account registration service, or Form T3APP, Application for Trust Account Number.

For information about authorizing a representative for the trust, see "Giving or cancelling an authorization" on page 87.

What you need before you apply

You need to know your trust name, trustee contact information, trust creation date, and trust type. If you are unsure of the trust's name, see "What to file - Instructions for bare trusts" on page 30. However, see also "Bare trusts filing relief for 2023 and 2024" in "What's new for 2024" on page 3.

You will also need supporting documentation, such as a signed copy of the trust document or the last will and testament. In some situations, there may not be a written trust document or it may not be clear what constitutes a trust agreement.

Examples of documents establishing a trust relationship include, but are not limited to, the following:

• Trust agreement, deed, or settlement

• Trust declaration

• Last will and testament (in the case of a testate estate)

• Notarial will (Province of Québec)

• Certificate of appointment of estate trustee with the last will and testament attached for a testate estate

• Certificate of appointment of estate administrator for an intestate estate

• Bare trust agreement

• Documentation evidencing institutions and arrangements governed by the laws of the Province of Québec that are deemed to be trusts under subsection 248(3) of the Income Tax Act

• Other documentation evidencing the establishment and terms of the trust

As many different arrangements can be trusts, if there are no written documents for the trust, please submit a written summary (typewritten or legibly printed) of the nature of the trust arrangement, including the title "Summary of [enter trust name]".

The written summary should include the date of creation of the trust and the full names of the trustees, settlor, and beneficiaries.

Online trust account registration service

You can access the Trust Account Registration service in these portals:

• My Account, under "More Services" in the menu on the left-hand side

• My Business Account, under "More Services" in the menu on the left-hand side

• Represent a Client, in the menu on the left-hand side

The trust's supporting documentation can be uploaded electronically at the time of registration, using the Submit trust documentation button on the last page of the registration process.

Using Form T3APP, Application for Trust Account Number

Fill out and sign Form T3APP and send it to us with a copy of the trust's supporting documentation at the applicable address listed on page 3 of Form T3APP.

Receiving your trust account number

If you use the Trust Account Registration service, you will receive the trust account number immediately after you complete the online registration process. Ensure to send us a copy of the trust document or signed last will and testament.

Offline access to a trust account

A trustee or an authorized representative can obtain information and request certain changes by mail or by phone using the contact information for their tax centre listed on page 23 of this guide.

Online access to My Trust Account

My Trust Account can be accessed through Represent a Client. To gain access to My Trust Account, primary trustees must have access to Represent a Client. Once the trust account number has been issued, the trustee needs to register as Primary Trustee through the Authorization request option of Represent a Client. If you do not have access to Represent a Client, you can register online. For more information, go to canada.ca/cra-registration.

Failure to provide the trust account number

After the CRA assigns the trust account number, you must use it when filing the trust's T3 return. Each failure to do so will result in a $100 penalty.

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