Canadian Trusts Prepare For Huge Reporting Requirements
Canadian trust advisors are preparing for the new income tax rules requiring increased reporting requirements from dormant and active Canadian trusts. Even trusts that have no income and previously did not file a tax return (for example trusts used to hold a holiday home or residence in the US) and trusts used to hold private company shares as part of an estate freeze, will be caught by the new rules.
Going forward, almost all Canadian trusts to report anyone with influence over trustee decisions such as details of the settlor, all trustees and beneficiaries now have to file a tax and information return, with 2021 being the first year, reporting the following information:
- Full name.
- Date of birth.
- Tax identification numbers.