Bare Trust: New Reporting Requirements

On December 15, 2022, the government passed Bill C-32 bringing into effect new trust reporting rules that apply to trusts with tax years ending December 31, 2023. Included in these new rules are the reporting requirements for Bare Trusts.
A Bare Trust is a trust arrangement where the legal title of an asset is held by a person, and the beneficial ownership is held by a separate person. The person holding legal title is considered the trustee.

Some examples of Bare Trusts are:

  • A child is named as a joint bank account holder on a parent’s bank account in order to assist the parent with their personal banking but has no personal benefit.
  • A child is on title of a parent’s home for estate planning reasons but does not live in the home.
  • An asset is owned by a person but is recorded and used in their corporation as a business asset.

The filing deadline for bare trusts is 90 days from December 31, for the 2024 tax year this falls on March 30. There are significant fines for not filing a return or filing a return late. Late filing penalties are $25 per day (minimum $100, maximum $2500), and additional penalties equal to the greater of $2500 or 5% of the maximum value of the property held by the trust during the year, where a failure to file was made knowingly or due to gross negligence.
There are some exemptions to the reporting requirements such as if the trust holds cash or investments with a fair market value less than $50,000 throughout the year. The rules are complex, so if you think you may be subject to the new filing rules please contact us.

Disability Tax Credit

What is the Disability Tax Credit? The Disability Tax Credit is a valuable benefit available to those suffering with disabilities, as well as their supporting

Read More »

Newsletter and Blog Subscription

Sign up for our blog and newsletter to receive important accounting tips for you or your business. You can unsubscribe at any time!

User Registration

A career you can grow with.