The Canada Revenue Agency (CRA) has made a last-minute decision to rescind the new rule that trustees of Canadian bare trusts must file a trust return for the 2023 tax year.

The announcement, made on the day before the filing deadline, is 'in recognition that the new reporting requirements for bare trusts have had an unintended impact on Canadians', said the CRA. It follows on the heels of the concession in March 2024 that trustees who filed late would not be penalised except in cases of serious misconduct.

The new trust reporting rules were enacted in 2023, applying for taxation years ending on or after 31 December 2023. They require many more trusts to file an annual T3 return, including the Schedule 15 (Beneficial Ownership Information of a Trust) form, many for the first time. As well as bare trusts, under which the trustee acts as agent for the beneficiaries, the new rules also catch many foreign trusts that hold taxable Canadian property, have a Canadian resident as beneficiary or hold property transferred or loaned by a Canadian resident. Trusts with a 31 December 2023 tax- year-end were required to file their T3 by 2 April 2024.