Filing the Trust Income Tax Return
As a rule, a trust subject to Québec income tax for a given taxation year must file form TP-646-V, Trust Income Tax Return, if it has income tax payable for that year.
- The taxation year of a graduated rate succession that is wound up ends on the winding-up date, which generally corresponds to the date of distribution of the property.
- In the case of an inter vivos trust, you must file the final return no later than 90 days following the calendar year in which the trust was wound up.
- The taxation year of a trust varies according to whether the trust is a testamentary trust or an inter vivos trust.
- Trusts are liable to a late-filing penalty for failing to file their returns on time. When determining the amount of unpaid tax for the purposes of calculating a penalty, we take into account any losses carried forward from a previous taxation year.
- Trusts are liable to penalties and penal proceedings for failing to provide required information or for providing inaccurate or incomplete information.
- Certain trusts may be required to pay income tax instalments for a given taxation year.
To avoid penalties, you can rectify the trust's tax situation by making a voluntary disclosure. The trust will nonetheless have to pay the income tax due and any interest accrued.