Overview of 2025 Trust Reporting Changes
Changes proposed in Bill C-15 (implementing certain parts of Budget 2025) bring clarity to who must file the T3 Trust Income Tax Return and when, especially concerning bare trusts and reporting of beneficial ownership via Schedule 15. (canada.ca)
Bare Trusts vs Other Trusts
- Bare trusts hold legal title only; beneficiaries have the full equitable ownership and control.
- Under the new rules, bare trusts are exempt from filing Schedule 15 for 2025 taxation year, unless subjected to specific CRA demands. But starting with trust tax years ending in 2026, many bare trusts may no longer avoid reporting. (canada.ca)
- Other trusts (i.e. family trusts, discretionary trusts) now are required to file T3 return including Schedule 15 for 2025 if conditions met. Deadline: 90 days after tax year end (March 31, 2026 for calendar year-end trusts). (canada.ca)
Practical Obligations for Trustees
- Determine whether your trust is a bare trust: if yes, often exempt for 2025; avoid claiming exemptions without confirming.
- Ensure Schedule 15 accuracy: list all beneficial owners, their addresses, dates of birth/tax IDs. Residential status matters.
- Keep tax year-end dates in view: for 2025 trust year‐end (e.g. December 31), file by March 31, 2026 if Schedule 15 applies. For trusts ending later in year, count 90 days out. (canada.ca)
- Document governance: clarify trust deed terms, beneficiary powers, control mechanisms—they influence beneficial ownership and whether exemptions apply.
Examples
- Family trust that awards income to children and has discretionary power to change beneficiaries: must file with Schedule 15 for 2025, with complete information.
- Bare trust set up solely to hold property with equitable owners identifiable: exempt for 2025 but plan for 2026 where Schedule 15 may be required.
Common Missteps to Avoid
- Assuming bare trust status automatically means no filing—CRA’s notice says “may be required.” Always check conditions. (canada.ca)
- Late filing leading to penalties; deadlines are strict.
- Incomplete beneficial ownership disclosures—CRA may request further info if missing.
- Ignoring updates: CRA T4013 Trust Guide and T3 returns & schedules have been updated to reflect the changes. Use the current forms. (canada.ca)
Actionable Takeaways
- Review trust structures now; prepare records ahead of 2026 changes.
- Use the updated Trust Guide 2025 from CRA and follow new instructions for Schedule 15.
- If unsure whether bare trust or not, consult legal/tax professional.
- For multi-jurisdictional trusts, consider impact of beneficial ownership laws in foreign jurisdiction too.
Bottom line: The era of blurred trust reporting is ending. Those managing trusts need clarity, accuracy, and timely action to avoid costly missteps.
Author: NomadicTax Research Team