Canada: Enhanced reporting rules for trusts

Canada: Enhanced reporting rules for trusts

Many Canadian trusts will soon face new enhanced reporting requirements.


New trust reporting rules apply to tax years ending after 30 December 2021 (that is, the rules effectively apply to trust's tax years ending on or after 31 December 2021).

These new rules may be onerous for certain trusts. For example, an affected trust will have to provide information on its income tax return pertaining to the trust's beneficiaries, trustees, settlors, and protectors. Trusts that fail to report this required information may face significant penalties of up to 5% of the highest total fair market value of all property held within the trust during the year.

KPMG observation

Before these changes come into effect, affected trusts and taxpayers need to become familiar with the new rules and consider appropriate planning that may alleviate their impact. In particular, consider allowing sufficient lead time to obtain the required information and understand how to meet the obligations so that enhanced penalties for the failure to comply will not apply.

Read a November 2020 report [PDF 95 KB] prepared by the KPMG member firm in Canada

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