RQConf_PartnerLoginUrl RQConf_CheckUrl

The Charter of the French language and its regulations govern the consultation of English-language content.

Principal Changes in the Trust Income Tax Return for 2023

This page presents the principal changes for 2023 in the trust income tax return.

RL-16 slips – Trust income

Trusts that file more than 5 RL-16 slips in a calendar year have to file the slips online (in an XML file) effective January 1, 2024. The threshold was 50 before January 1, 2024.

For more information, see the RL-16: Trust Income page.

Payments of more than $10,000

As of January 1, 2024, trusts must make payments of more than $10,000 electronically (for example, online or through a financial institution), unless there is a specific reason they cannot. Failure to comply may result in a penalty.

For more information, see the Trusts: Payment Methods page.

Additional information about the trust

For taxation years ending after December 30, 2023, a trust that is resident in Canada (other than a trust created by law or by a judgment) must provide additional information about each person who, over the course of the year, is:

  • a trustee;
  • a beneficiary;
  • a settlor of the trust;
  • a person who can exert control over the trustee's decisions with respect to the allocation of income or capital from the trust under the terms of the trust deed or a related agreement.

The following trusts are not required to provide such information:

  • trusts that have existed for less than three months;
  • trusts that hold assets with a total fair market value (FMV) of less than $50,000 throughout the taxation year, if the only assets they hold over the year are one or more of the following:
    • cash,
    • certain government debt securities,
    • a share, debt or right listed on a designated stock exchange,
    • a share of the capital stock of a mutual fund corporation,
    • a unit of a mutual fund trust,
    • an interest in a segregated fund trust,
    • an interest as a beneficiary under a trust whose units are all listed on a designated stock exchange;
  • trusts that are required under rules of professional conduct or the laws of Canada or a province to hold funds for the purpose of any activity that is regulated under those rules or laws, provided the trusts are not administered as separate trusts for a particular client or particular clients (an exception is made for general trust accounts held by an attorney, but not for specific client accounts);
  • trusts that are registered charities;
  • trusts that are clubs, societies or associations established and operated for non-profit purposes;
  • mutual fund trusts;
  • segregated fund trusts;
  • trusts whose units are all listed on a designated stock exchange;
  • master trusts;
  • graduated rate estates (GREs);
  • qualified disability trusts (QDTs);
  • employee life and health trusts;
  • certain government funded trusts;
  • trusts established under or governed by any of the following plans, funds or accounts:
    • deferred profit-sharing plan (DPSP),
    • pooled registered pension plan (PRPP),
    • registered disability savings plan (RDSP),
    • registered education savings plan (RESP),
    • registered pension plan (RPP),
    • registered retirement income fund (RRIF),
    • registered retirement savings plan (RRSP),
    • profit-sharing plan (PSP),
    • registered supplementary unemployment benefit plan (RSUBP),
    • tax-free savings account (TFSA),
    • first home savings account (FHSA),
  • cemetery care trusts and trusts governed by an eligible funeral arrangement.

If a trust fails to file the income tax return with the required additional information by the deadline, it is liable to a penalty of $1,000 and, starting on the second day, an additional penalty of $100 per day until the return with the additional information is filed, to a maximum of $5,000.

In addition to this new requirement, certain trusts that were previously not required to file a tax return will now be required to file one.

Reduction of the taxation rate for graduated rate successions and qualified disability trusts

Effective 2023, the taxation rate applicable to the two lowest tax brackets has been reduced for GREs and QDTs. The rate for the lowest bracket went from 15% to 14% and that for the second lowest, from 20% to 19%.

A GRE benefits from graduated rates for a maximum of 36 months following the death of an individual.

For more information on these types of trusts, refer to the Graduated Rate Estate and Qualified Disability Trust pages.

Reduction of the applicable rate for calculating the alternative minimum tax

As of 2023, the applicable rate for calculating the AMT drops from 15% to 14%.

For more information on the AMT, refer to the instructions for lines 130 and 132 in the Guide to Filing the Trust Income Tax Return (TP-646.G-V).

Flipping residential property

Since January 1, 2023, if a trust disposes of a residential property (including rental property or a purchase option) that it held for fewer than 365 consecutive days, we may consider that the trust flipped a property. The profit from flipping the property will be fully taxable as business income.

For more information, refer to the instructions for lines 55a and 55 in Part 4 of the Guide to Filing the Trust Income Tax Return (TP-646.G-V).

Obligation to enter the trust identification number and account number in returns, reports and documents filed

A trust has to enter the identification number from a notice of assessment we issue in its Trust Income Tax Return (TP-646-V).

If the trust does not have an identification number, it must get one before filing its income tax return. It can apply for a number using:

As of 2018, a trust must also:

  • enter the trust account number appearing on federal form T3RET, Trust Income Tax and Information Return, in its income tax return or information return;
  • provide the trust account number to any person (including any related person) or partnership (including a tax shelter) that is required to file an information return in which this number must be entered.

As of March 26, 2021, the trust identification number and account number must be included in all returns, reports or other documents the trust is required to file under tax legislation.

Failure to provide this information may result in a penalty.

Note End of note

One mission. Concrete actions.

Read all about how we work to support and inform you. Our vision and values guide us as we carry out our role.

Veuillez patienter