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.

As a trustee, you must file the trust's income tax return and all required documents within 90 days following the end of the trust's taxation year.

You must also pay any income tax owing and provide all beneficiaries with RL-16 slips within the same time period.

The taxation year of a trust varies depending on whether the trust is a testamentary trust or an inter vivos trust.

Final return

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.

Penalties

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. Trusts are liable to penalties and penal proceedings for failing to provide required information or for providing inaccurate or incomplete 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. 

Voluntary disclosure

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.

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