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 estate that is wound up ends on the winding-up date, which generally corresponds to the date of distribution of the property. You must therefore file the final return of the trust no later than 90 days after that date.
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.
As the trustee, you must provide all the information required to calculate the trust's income tax payable, such as income, deductions and tax credits. You are liable to penalties for failing to provide certain information.
Trusts are liable to a late-filing penalty for failing to file their income tax 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.
To avoid penalties, you can rectify the trust's tax situation by making a voluntary disclosure. No penalty will be imposed on a trust that makes a voluntary disclosure, but it will nonetheless have to pay the income tax due and any interest accrued.