T3 Trust Return Filing for Trustees, Executors and Family Trusts
Every year a trust or estate has income to report or beneficiaries to inform, a T3 return is due 90 days after its year end. Bestax prepares the return, the beneficiary slips and the ownership schedule from reconciled records, so trustees meet the deadline and beneficiaries can file their own returns.
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Who Needs a T3 Trust Return
The T3 is filed by the trustee, executor or administrator, not the beneficiaries. Most express trusts now file every year, even with no income, because the return also reports who is behind the trust.
- Trustees of a family trust that earns dividends, interest or capital gains.
- Executors of an estate that earns income after the date of death.
- Estates designated as graduated rate estates in their first 36 months.
- Trustees of spousal, alter ego or joint partner trusts.
- Trusts that must report trustees, settlors and beneficiaries even with no income.
- Trusts approaching a 21-year anniversary, when a deemed disposition is reported.
A trust cannot file until it has a CRA trust account number. A new trust should apply for one well before its first return is due.
Setting up a new trust? See Trust Setup. Handling an estate? Start with the Final Tax Return for a Deceased Person. Our guide to bare trusts in Canada explains how those arrangements are treated.
What Our T3 Filing Service Covers
From the trust account number to the slips in beneficiaries’ hands, we prepare each part of the annual filing.
- An application for the trust account number for new trusts and estates.
- The T3 Trust Income Tax and Information Return, prepared from the trust’s reconciled records.
- Income allocations to beneficiaries, and designations that keep dividends, capital gains and foreign income in their original form.
- T3 slips and the T3 summary, issued to beneficiaries by the same deadline.
- Schedule 15 beneficial ownership information on trustees, settlors, beneficiaries and anyone with control.
- Reporting of the 21-year deemed disposition and any graduated rate estate designation.
The Rules Behind Every T3 Return
A trust is taxed as a separate individual. Income it pays or makes payable to beneficiaries in the year is generally deducted by the trust and taxed in their hands; income it keeps is taxed in the trust, usually at the top rate unless it is a graduated rate estate or a qualified disability trust.
Enhanced trust reporting means most express trusts file every year and include Schedule 15, naming every trustee, settlor and beneficiary and anyone who can control trustee decisions. Bare trusts have been exempted from filing for recent tax years, so for a bare trust we check the CRA’s guidance for the year before deciding whether a return is needed.
The T3 return and the T3 slips are due 90 days after the trust’s tax year end, which is March 31 for a December 31 year end.
Allocations and designations decide how each beneficiary reports the income, so they must be settled before the slips are issued.
Schedule 15 is part of the return for most trusts, with names, addresses, dates of birth and tax numbers for each person reported.
Late filing brings penalties on the return and on missing beneficial ownership information, plus interest on any balance owing.
Most trusts have a December 31 year end. A graduated rate estate can choose a different year end, which changes its deadline.
T3 Filings and Their Deadlines
The return, the slips and the events that come up in a trust’s life each carry their own timing.
| Filing | Who files it | Deadline | What it does |
|---|---|---|---|
| T3 return with Schedule 15 | The trustee, executor or administrator | 90 days after the trust’s tax year end | Reports the trust’s income, tax and beneficial ownership |
| T3 slips and summary | The trustee | The same 90-day date | Tells each beneficiary what to report on their own return |
| First return of a new estate | The executor | 90 days after the estate’s first year end | Can designate the estate as a graduated rate estate |
| 21-year deemed disposition | The trustee | With the return for the year of the anniversary | Reports gains on the trust’s capital property at fair market value |
Planning for the 21-year anniversary should start years ahead, because the options that reduce the tax take time to put in place.
What We Need to Prepare Your T3
A T3 is prepared from the trust’s own records, kept separately from any trustee’s or beneficiary’s.
For the first return of a trust or estate, we also need the documents that created it and the details of everyone Schedule 15 asks about.
- The trust deed or will, and any amendments.
- The trust account number, or the details needed to apply for one.
- Investment statements and T-slips issued to the trust for the year.
- Bank statements and records of payments made to or for beneficiaries.
- Trustee resolutions on the income allocated to each beneficiary.
- Names, addresses, dates of birth and tax numbers for trustees, settlors and beneficiaries.
Our T3 Filing Process
Review the trust
We read the deed or will, confirm the trust type, year end and filing requirement.
Plan the allocations
Before the year closes, we work through how much income to pay or make payable to each beneficiary.
Reconcile the records
We match the trust’s bank and investment records to its income for the year.
Prepare return and slips
We prepare the T3, Schedule 15 and the beneficiary slips, and review them with the trustee.
File and deliver
We file the return and slips by the deadline and send each beneficiary their slip.
Track the dates
We keep the trust’s year end and 21-year anniversary on our calendar for the years ahead.
Why Trustees Choose Bestax for T3 Filing
Allocations planned in time
The decisions that save tax must be made before year end, so we raise them before December 31.
Reporting kept current
We follow the CRA’s trust reporting guidance each year, including which trusts must file.
Slips beneficiaries can use
Each beneficiary gets a slip that matches the return, by the same deadline.
Records reconciled first
The return is prepared from reconciled books, not from statements gathered at the last minute.
Work with your lawyer
Bestax does not draft or interpret trust deeds as legal advice. We work with your lawyer where a question turns on the deed.
Related Bestax Services
Estate & Trust Tax Services for planning, executor filings and trust tax work as a whole.
Trust Fund Accounting to keep the trust’s books that each T3 is prepared from.
Personal Tax Returns for beneficiaries reporting their T3 slips.
Catch-Up Bookkeeping for trusts with years of records to rebuild before filing.
What Our Clients Say
After years of DIY tax filing, I decided to work with professionals, and I’m glad I chose Bestax. Their team corrected years of minor errors and even identified deductions I had missed. The savings more than paid for the service.
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Frequently Asked Questions
Within 90 days after the end of the trust’s tax year. For a trust with a December 31 year end, that is March 31 of the following year, or the next business day if it falls on a weekend or holiday. The T3 slips are due on the same date.
Often, yes. Under the enhanced reporting rules, most express trusts must file a T3 with Schedule 15 every year, whether or not they earned income. Some trusts are exempt, so we confirm the requirement for your trust each year.
Bare trusts have been exempted from filing for recent tax years, but the rules for them have changed more than once. We check the CRA’s current guidance for the year in question before deciding whether a return and Schedule 15 are needed.
It is an estate that can be taxed at graduated rates, rather than the top rate, for up to 36 months after the date of death, provided the executor designates it on the estate’s first T3 return. Only one estate per deceased person can qualify.
Most personal trusts are treated as selling their capital property at fair market value every 21 years, and the gain is taxed in the trust. The deemed disposition is reported on the T3 for that year, and planning before the anniversary can often reduce the tax.
The CRA can charge a late-filing penalty on any tax owing, a separate penalty for missing beneficial ownership information, and interest on unpaid balances. Beneficiaries also cannot file their own returns correctly without their slips, so a late T3 affects them too.