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. If the trust is a bare trust, read the section Enhanced trust reporting rules under What's new for 2025.
A T3 return must be filed if A or B applies.
A. 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.
Note : This determination must also be applied to a trust deemed resident in Canada under subsection 94(3).
B. Income from the trust property is subject to tax, and one or the other:
-
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,
-
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 at least one of the following situations:
-
has tax payable
-
is requested to file
-
is a deemed resident trust
-
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 in the capital stock of a corporation)
-
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)
-
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, read Line 24 - Upkeep, maintenance, and taxes of a property used or occupied by a beneficiary
-
receives from the trust property any income, gain, or profit that is allocated to one or more beneficiaries, and the trust has either:
-
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 where a T3 return must be filed
A T3 return must be filed in the following situations, even if no tax is payable:
-
If the trust holds property subject to subsection 75(2) and received income, gains, or profits from that property during the year
-
If the trust made a distribution of capital to one or more beneficiaries, a T3 return must be filed even if the trust's total income from all sources is $500 or less.
Note |
|
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, read Trust account number. |
Tax tip
You may not have to file a T3 return if the estate is distributed immediately after the individual dies, or if the estate did not earn income before the distribution. In these cases, you should give each beneficiary a statement showing their share of the estate.
Note |
|
Although a T3 return may not be required, the legal representative of a deceased individual must file a final T1 Income Tax and Benefit Return for the deceased's year of death. |
For more information, see Doing taxes for someone who died.
Listed Trusts
Listed trusts refer to the situations or trust types provided in subsection 150(1.2) and differ based on the taxation year end of the trust.
For taxation years ending on or after December 31, 2024 and before December 31, 2025 a listed trust is a trust that:
-
(a) had been in existence for less than three months;
-
(b) holds assets with a total fair market value that does not exceed $50,000 throughout the year;
-
(b.1) meets the following conditions:
-
(i) each trustee is an individual,
-
(ii) each beneficiary is an individual and is related to each trustee, and
-
(iii) the total fair market value of the property of the trust does not exceed $250,000 throughout the year and the only assets held by the trust throughout the year are one or more of:
-
(A) money (note that money does not include collectible gold or silver coins, or gold or silver bars),
-
(B) a guaranteed investment certificate issued by a Canadian bank or trust company incorporated under the laws of Canada or of a province,
-
(C) a debt obligation described in paragraph (a) of the definition "fully exempt interest" in subsection 212(3),
-
(D) debt obligations issued by:
-
(I) a corporation, mutual fund trust or limited partnership the shares or units of which are listed on a designated stock exchange in Canada,
-
(II) a corporation the shares of which are listed on a designated stock exchange outside Canada, or
-
(III) an authorized foreign bank that are payable at a branch in Canada of the bank,
-
-
(E) a share, debt obligation, or right listed on a designated stock exchange,
-
-
(F) a share of the capital stock of a mutual fund corporation,
-
(G) a unit of a mutual fund trust,
-
(H) an interest in a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a)),
-
(I) an interest as a beneficiary under a trust, all of the units of which are listed on a designated stock exchange,
-
(J) personal-use property of the trust, or
-
(K) a right to receive income or gains on property described in (A) to (J) above;
-
(c) is required under the relevant rules of professional conduct or the laws of Canada or a province to hold funds for the purposes of an activity that is regulated under those rules or laws, provided:
-
(i) the trust is not maintained as a separate trust for a particular client or clients, or
-
(ii) the only assets held by the trust throughout the year are money with a value that does not exceed $250,000 (this provides an exception for a lawyer's general trust account, or a specific client trust account holding only money throughout the year with a value that does not exceed $250,000);
(d) is a registered charity;
(e) is a club, society or association described in 149(1)(l);
(f) is a mutual fund trust,
(g) is a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a));
(h) is a trust, all of the units of which are listed on a designated stock exchange;
(i) is a trust prescribed to be a master trust;
(j) is a graduated rate estate, or would be a graduated rate estate in the year if the estate had properly designated itself as a graduated rate estate;
(k) is a qualified disability trust;
(l) is an employee life and health trust;
(m) is a trust described under paragraph 81(1)(g.3);
(n) is a trust under or governed by a:
-
(i) deferred profit-sharing plan,
-
(ii) pooled registered pension plan,
-
(iii) registered disability savings plan,
-
(iv) registered education savings plan,
-
(v) registered pension plan,
-
(vi) registered retirement income fund,
-
(vii) registered retirement savings plan,
-
(viii) tax-free savings account,
-
(ix) employee profit sharing plan,
-
(x) registered supplementary unemployment benefit plan, or
-
(xi) first home savings account;
(o) is a cemetery care trust or a trust governed by an eligible funeral arrangement;
(p) is an eligible trust as defined in subsection 135.2(1); or
(q) is established for the purpose of complying with a statute of Canada or a province and the person or persons acting as trustee of the trust hold the property in trust for a specified purpose (this provides an exception for certain statutorily created trust relationships, such as those of bankruptcy trustees or provincial guardians)
For taxation years ending on or after December 31, 2025, a listed trust is a trust that:
-
(a) had been in existence for less than three months;
-
(b) holds assets with a total fair market value that does not exceed $50,000 throughout the year;
-
(b.1) meets the following conditions:
-
(i) each trustee is an individual,
-
(ii) each beneficiary is:
-
(A) an individual (other than a trust) and related to each trustee, or
-
(B) a graduated rate estate (or would be a graduated rate estate in the year if the estate had properly designated itself as a graduated rate estate) of an individual who was a beneficiary described in (A) in the year of the individual's death,
-
-
(iii) the total fair market value of the property of the trust does not exceed $250,000 throughout the year and the only assets held by the trust throughout the year are one or more of:
-
(A) money, including deposits in a Canadian financial institution as defined in subsection 270(1) (note that money does not include collectible gold or silver coins, or gold or silver bars),
-
(B) a guaranteed investment certificate issued by a Canadian bank, trust company or credit union incorporated under the laws of Canada or of a province,
-
(C) a debt obligation described in paragraph (a) of the definition "fully exempt interest" in subsection 212(3),
-
(D) debt obligations issued by:
-
(I) a corporation, mutual fund trust or limited partnership the shares or units of which are listed on a designated stock exchange in Canada,
-
(II) a corporation the shares of which are listed on a designated stock exchange outside Canada, or
-
(III) an authorized foreign bank that are payable at a branch in Canada of the bank,
-
-
(E) a share, debt obligation, or right listed on a designated stock exchange,
-
-
(F) a share of the capital stock of a mutual fund corporation,
-
(G) a unit of a mutual fund trust,
-
(H) an interest in a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a)),
-
(I) an interest, as a beneficiary under a trust, all of the units of which are listed on a designated stock exchange,
-
(J) personal-use property of the trust,
-
(K) a right to receive income or gains on property described in (A) to (J) above, or
-
(L) an exempt policy (as defined in subsection 12.2(11)) issued by a Canadian life insurer, the fair market value of which is to be determined by its cash surrender value;
-
(c) is required under the relevant rules of professional conduct or the laws of Canada or a province to hold funds for the purposes of an activity that is regulated under those rules or laws, provided:
-
(i) the trust is not maintained as a separate trust for a particular client or clients, or,
-
(ii) the only assets held by the trust throughout the year are assets described in clause (b.1)(iii)(A) or (B) with a total fair market value that does not exceed $250,000 (this provides an exception for a lawyer's general trust account, or a specific client trust account holding only money, including deposits in a Canadian financial institution as defined in subsection 270(1), and guaranteed investment certificates issued by a Canadian bank, trust company or credit union incorporated under the laws of Canada or of a province throughout the year with a total fair market value that does not exceed $250,000);
(d) is a registered charity;
(e) is a club, society or association described in 149(1)(l);
(f) is a mutual fund trust,
(g) is a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a));
(h) is a trust, all of the units of which are listed on a designated stock exchange;
(i) is a trust prescribed to be a master trust;
(j) is a graduated rate estate (or would be a graduated rate estate in the year if the estate had properly designated itself as a graduated rate estate);
(k) is a qualified disability trust;
(l) is an employee life and health trust;
(m) is a trust described under paragraph 81(1)(g.3);
(n) is a trust under or governed by a:
-
(i) deferred profit-sharing plan,
-
(ii) pooled registered pension plan,
-
(iii) registered disability savings plan,
-
(iv) registered education savings plan,
-
(v) registered pension plan,
-
(vi) registered retirement income fund,
-
(vii) registered retirement savings plan,
-
(viii) tax-free savings account,
-
(ix) employee profit sharing plan,
-
(x) registered supplementary unemployment benefit plan,
-
(xi) first home savings account, or
-
(xii) a retirement compensation arrangement the primary purpose of which is to provide annual or more frequent periodic retirement benefits to supplement the benefits provided out of or under one or more registered pension plans, registered retirement savings plans, deferred profit sharing plans or pooled registered pension plans;
(o) is a cemetery care trust or a trust governed by an eligible funeral arrangement;
(p) is an eligible trust as defined in subsection 135.2(1); or
(q) is established for the purpose of complying with a statute of Canada or a province and the person or persons acting as trustee of the trust hold the property in trust for a specified purpose (this provides an exception for certain statutorily created trust relationships, such as those of bankruptcy trustees or provincial guardians); or
(r) is an employee ownership trust
When you must submit your beneficial ownership information
Generally, a trust (other than a listed trust) that is required to file a T3 return must report beneficial ownership information requested on Form T3SCH15, Beneficial Ownership Information of a Trust (Schedule 15). 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 beneficial ownership information requested on Schedule 15, the trust may still be required to file a T3 return.
For more information about Schedule 15, read the section .
Did you know
When a trust has disposed of all property in the trust, including distribution of property to beneficiaries, the trust is generally considered to have ceased to exist. In a taxation year where this happens, the trust will have a filing obligation due to the disposition of property in the taxation year and therefore would be required to file.
Non-resident trusts - Rental income or timber royalty from Canada
Rental income from real property in Canada or timber royalties from Canadian timber resource property paid to a non-resident trust is subject to a 25% withholding tax on the gross amount under Part XIII of the Act. This tax is levied on the income itself, rather than directly on the trust, and may be reduced if a reciprocal tax treaty applies.
You may file a separate T3 return for a non-resident trust pursuant to an election under section 216 in respect of the trust's net rental or timber royalty income.
When filing the T3 return, indicate "Section 216" on the top of the first page of the return. For more information, go to IT393R2 ARCHIVED - Election Re: Tax on Rents and Timber Royalties Non-Residents.
