Taxpayers’ Ombudsperson Praises CRA for Exempting Bare Trustees from 2024 Filing Requirement
Ottawa, October 30, 2024 — The Taxpayers’ Ombudsperson has expressed satisfaction with the Canada Revenue Agency’s (CRA) decision to exempt bare trustees from the 2024 filing requirement.
A bare trust is a legal arrangement in which one person (the trustee) holds property on behalf of another person (the beneficiary). The trustee has no beneficial interest in the property and is responsible for managing it solely for the benefit of the beneficiary.
In recent years, the CRA has required all trustees to file annual trust income tax returns, known as T3 returns. This has been burdensome for bare trustees, who typically do not have any income or expenses related to the trust.
In response to concerns raised by the Taxpayers’ Ombudsperson and other stakeholders, the CRA has announced that bare trustees will be exempt from the 2024 filing requirement.
“I am pleased that the CRA has listened to the concerns of bare trustees and has taken steps to reduce their administrative burden,” said the Taxpayers’ Ombudsperson. “This exemption will provide significant relief to many Canadians who have been struggling to comply with the filing requirement.”
The exemption applies to bare trusts that meet the following conditions:
- The trust is a valid trust under Canadian law.
- The trustee is not a beneficiary of the trust.
- The trustee does not have any discretion over the distribution of the trust assets.
- The trust does not have any income or expenses.
Bare trustees who meet these conditions will not be required to file a T3 return for tax year 2024. However, they may still be required to file a return for prior years if they have not already done so.
The Taxpayers’ Ombudsperson encourages all bare trustees to review the CRA’s guidance on this issue to determine if they are eligible for the exemption. The guidance is available on the CRA website at www.canada.ca/en/revenue-agency.html
About the Taxpayers’ Ombudsperson
The Taxpayers’ Ombudsperson is an independent officer of the Parliament of Canada. The Ombudsperson’s mandate is to investigate complaints from taxpayers who have experienced difficulties with the CRA. The Ombudsperson also makes recommendations to the CRA on systemic issues that affect taxpayers.
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