Changes to Beneficiary Reporting on Trust Income Tax Returns

Each year, a T3 Trust Guide is available to help file a return for an inter vivos or testamentary trust. The guide provides information on how to complete a T3 Trust Income Tax and Information Return, the T3 Slip – Statement of Trust Income Allocations and Designations and the T3 Summary – Summary of Trust Income Allocations and Designations.

This year, new beneficiary reporting requirements were added to the 2016 T3 Trust Guide.

Under these new requirements, if the beneficiary of a trust has changed, the trust must attach a note to the T3 Trust Income Tax and information Return which provides the following information:

• Beneficiaries’ names
• Beneficiaries’ Social Insurance numbers
• Date of the Change

Recently, a revision was made to the 2016 T3 Guide, which outlines which trusts must report changes to beneficiary information.

The 2016 Guide now requires that only personal trusts, spousal or common law partner trusts, joint spousal or common law partner trusts, or alter ego trusts report changes to beneficiary information when filing a T3 return.

As such, Investment Trusts, which would have had substantial amounts of information to report under the new reporting requirements, do not have to report changes to beneficiary information.

Trusts affected by this, include but are not limited to:

• segregated or mutual fund trusts
• unit trusts
• pooled trusts

If you have questions about how these changes affect your current trust, or if you would like to set up a trust to better protect your assets, please contact us today or take advantage of our complimentary consultation.