Income Tax Instalments of Trusts

A trust other than a graduated rate estate (GRE) must pay income tax instalments for the taxation year if:

  • it estimates that its net income tax payable for the year will exceed $1,800; and
  • its net income tax payable for one of the two previous years exceeded $1,800.

If the trust's principal source of income is farming or fishing, it must pay a single income tax instalment for the taxation year if:

  • it estimates that its net income tax payable for the year will exceed $1,800; and
  • its net income tax payable for the two previous years exceeded $1,800.

The net income tax payable for a given year corresponds to the income tax payable for the year minus the total income tax withheld and the refundable tax credits obtained for the year.

Making instalments

Quarterly instalments must be made by:

  • March 15
  • June 15
  • September 15
  • December 15

Each instalment must be equal to a quarter of the estimated income tax payable for the year or of the income tax payable for the previous year.

However, if a trust's principal source of income is farming or fishing, the trust must pay a single instalment by December 31 of the year. The instalment must be equal to two-thirds of the estimated income tax payable for the year or of the income tax payable for the previous year.

We send form TPZ-1026.F-V, Instalment Payments Made by a Trust, to notify trusts in writing of the amount of the income tax instalments that they must pay. This form includes a payment code. The instalment payments can be made:

A trust must pay its instalments by mail if it does not receive form TPZ-1026.F-V.

If the trust wants to calculate the amount of its instalment payments itself, it can get form TP-1026.F-V, Calculation of Instalment Payments to Be Made by Trusts. However, it may have to pay interest if it calculated the amount of its instalment payments itself and the amount turns out to be insufficient.

Note that if the trust is required to make instalment payments for 2023, we will charge interest, compounded daily, on any payment (or portion thereof) that is not made by the required date.

Specified investment flow-through trust

A specified investment flow-through trust (SIFT trust) must calculate and make instalment payments of income tax as if it were a public corporation. Accordingly, the SIFT trust must make instalment payments on a monthly basis, by the last day of each month, if its estimated income tax payable for the year and its income tax payable for the previous year both exceed $3,000.

For more information, see Specified Investment Flow-Through Trust.

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