Please see the first part of the article in our previous post.
A few basics to help people who think they may be part of a bare trust:
- It’s the trustee who must file the T3. This is the person who administers a joint bank or investment account – someone managing an account for a parent, for example. Ms. Prior said the settlor, a term for the person who contributed the assets to the trust, does not have to file. With a joint bank or investment account, the parent could be the settlor and the beneficiary.
- There may be an exemption to the filing requirement, for trusts with certain assets of $50,000 or less. Ms. Prior said the exemptions apply in cases where a bare trust has a bank account or an investment account with publicly traded stocks or mutual funds, but there could be exceptions. Example: dividend-paying stocks.
- There are penalties for non-compliance: $25 for each day you’re late in filing, with a minimum of $100 and a maximum of $2,500. Extra penalties may apply if you knowingly fail to file a trust return or make a false statement.
- The deadline for filing a T3 is April 2 this year, but the CRA has said it will not assess penalties for bare trust filings after that date.
- You’re expected to file a T3 annually, including a Schedule 15, and report changes from the previous year’s filing.
- Ms. Prior said the new bare trust filing requirements could also affect parents who were put on the title of a home with their kids to help them secure a mortgage, and adults who have opened informal trust accounts to invest on a minor child’s behalf.
Please see the next part of the article in our next post.
Source:
ROB CARRICK PERSONAL FINANCE COLUMNIST
PUBLISHED MARCH 4, 2024
UPDATED MARCH 5, 2024
The Global Mail
*The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions, a further review should be done by a qualified professional. No individual or organization involved in either the preparation or distribution of this text accepts any contractual, tortious, or any other form of liability for its contents.
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