Are you on title on a parent’s or child’s home for estate or gifting purposes? Do you have an in-trust-for (ITF) investment account for a minor-aged child? Do you have a jointly-held bank account with a child or parent?

As of the 2023 tax filing year, such arrangements may now require filing a T3 Trust Return within 90 days of year-end, or by March 30, 2024. Since March 30 2024 falls on a weekend, the deadline is extended to April 2, 2024.

Filing after the deadline can result in steep penalties, although late-filers for the 2023 tax year will be granted temporary relief as long as the T3 Return is filed in good faith.

Going forward, the penalty is $25 for each day the return is late, with a minimum penalty of $100 and maximum penalty of $2,500.

An additional penalty can apply for gross negligence (if the return is not filed knowingly or false/incomplete information is provided) equal to the greater of $2,500 or 5% of the highest value of the trust property in the year. This additional penalty is also applicable for the 2023 filing requirement.

Exceptions to the reporting requirements

Certain trusts are excluded from these new reporting requirements:

  • Trusts that have been in existence for less than three months at year-end
  • Trusts that hold only certain assets (such as cash or securities listed on a designated stock exchange) and have a total market value of $50,000 or less throughout the year
  • Registered plans such as RRSPs, RRIFs, registered pension plans, RDSPs, RESPs, TFSAs, and FHSAs
  • Graduated Rate Estates (GREs) and qualified disability trusts
  • Mutual Fund Trusts and registered charities

If you have an ITF for a minor-aged child valued above $50,000 and/or if you are on title for a child’s or parent’s property for estate or gifting purposes, you should consult with a legal professional and/or your tax accountant to see if you need to file a T3 return.