Bare trust reporting is a new requirement by the CRA this year, but most Canadians are likely unaware of its existence — or penalties.
From home office expenses to house flipping, Tyler Thielmann of Spring Financial discusses the tax changes you need to know for the 2023 filing season.If you’re part of a joint bank account or have co-signed a mortgage, you might be part of something called a “bare trust” agreement that many Canadians will have to file a tax return for in the coming weeks.
Bare trusts happen when someone legally owns an asset, but it technically belongs to someone else. The arrangement is essentially a separation of legal and beneficial ownership of a property. Trusts that hold less than $50,000 in assets may be exempt from the reporting requirements. Out of the examples above, this is likely the scenario for most joint accounts between family members.In order for a co-signed mortgage to count as a bare trust agreement, Abdulla says financial institutions require the parent to also be included on the title.
For the first time, bare trusts are required to file T3 Trust Income Tax and Information Returns for the 2023 year.The CRA’s deadline for trustees to file is April 2 — which notably comes before the general April 30 tax deadline for individuals. However, if you miss the deadline this year, you might be in the clear. The CRA announced this week that because the new bare trust rules may be unfamiliar to Canadians, the agency will be offering relief from the penalty and will only pursue blatant cases of gross negligence.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
CRA admits it paid out $63M in 'sham' tax refund schemeThe Canada Revenue Agency (CRA) headquarters Connaught Building is pictured in Ottawa on Monday, Aug. 17, 2020.
Read more »
How much are you spending to satisfy the CRA?Plus, March break freebies and a personal finance take on the benefits of choosing a hybrid vehicle or an EV
Read more »
New tax reporting requirements for bare trusts 'not easy to file': expertNew tax filing standards are in place for bare trust assets, and Ali Spinner, a tax partner at Crowe Soberman LLP, says these requirements will not necessarily offer the Canada Revenue Agency the financial transparency they’re hoping for.
Read more »
The 2024 tax season kicks off Monday. Here's what you need to knowThe Canada Revenue Agency (CRA) headquarters Connaught Building is pictured in Ottawa on Monday, Aug. 17, 2020.
Read more »
Flair Airlines owes $67 million in unpaid taxes as CRA opens door to seize carrier's propertyA Flair Airlines Boeing 737 sits on the runway apron.
Read more »
A court battle between the CRA and the Toronto Maple Leafs captain could be pivotal for other pro athletesJohn Tavares, seen above in March, is one of many NHL players who said they were excited to see the new women's professional league unfold.
Read more »