Who should file

Find out if you should file a T3RET T3 Trust Income Tax and Information Return (T3 return).

Unless otherwise stated, all statutory references on this webpage refer to the provisions of the Income Tax Act R.S.C. 1985, c.1 (5th Supp.), as amended.

Determining the existence of a trust

The Canada Revenue Agency (CRA) does not provide legal advice so it is not able to advise taxpayers about the application of the private law to their specific circumstances or to interpret trust documents. It is the responsibility of the parties involved in an arrangement to determine the true nature of their legal relationships and whether they give rise to a trust.

Determining whether a particular arrangement is a trust is a question of fact and law based on an analysis of the facts specific to each situation under the applicable private law. Taxpayers may wish to consult a legal advisor for help in understanding all of the legal consequences of their trust or ownership arrangements.

Refer to: Question 1.1 "What is a trust?" on the "Enhanced reporting rules for trusts and bare trusts: Frequently asked questions" page for a general overview of the legal (non-tax) principles that apply to trusts in Canada.

Rules for tax years ending on or after December 31, 2023

The rules governing which trusts must file a T3 return have been enhanced for tax years ending on or after December 31, 2023:

• All trusts, unless specific conditions are met, are required to file a T3 return annually.
• Generally, all trusts that are required to file a T3 return, other than listed trusts, must include specified information about each reportable entity of the trust (beneficial ownership information), as outlined on Schedule 15, with their T3 return. See below for the listed trusts applicable for tax years ending on or after December 31, 2023.
• Bare trusts are subject to the trust reporting rules. However, for the 2023 and 2024 tax years, the CRA will not require bare trusts to file a T3 return, including Schedule 15, unless the CRA makes a direct request for these filings. See below for more information on bare trusts.

Trusts that must file a T3 return each year

You must file a T3 return annually, even when you have no income, if your trust is all of the following:

• A trust that is resident in Canada (or a trust deemed resident in Canada under subsection 94(3))
• An express trust  (or for civil law purposes a trust other than a trust that is established by law or by judgement)
• Not a listed trust (see below for the listed trusts applicable for tax years ending on or after December 31, 2023)

Trusts that must file a T3 return for a tax year when certain situations apply

For all other trusts (resident and non-resident), including listed trusts, you must file a T3 return for tax years in which the trust meets any of the following:

• Has tax payable
• Is requested to file
• Is a deemed resident trust
• Is resident in Canada and has either disposed of, or is deemed to have disposed of, a capital property or has a taxable capital gain (for example, a principal residence, or shares in the capital stock of a corporation)
• Is a non-resident throughout the year, and has a taxable capital gain (other than from an excluded disposition described in subsection 150(5)) or has disposed of taxable Canadian property (other than from an excluded disposition)
• Holds property that is subject to subsection 75(2) 
• Has provided a benefit of more than $100 to a beneficiary for upkeep, maintenance, or taxes for property maintained for the beneficiary’s use (for more information, see "Line 24 – Upkeep, maintenance, and taxes of a property used or occupied by a beneficiary" in the T4013 T3 Trust Guide)
• Receives from the trust property any income, gain, or profit that is allocated to one or more beneficiaries, and the trust has any of the following :
  • Total income from all sources of more than $500
  • Income of more than $100 allocated to any single beneficiary
  • Made a distribution of capital to one or more beneficiaries
  • Allocated any portion of the income to a non-resident beneficiary

Listed trusts

Listed trusts refer to the situations or trust types provided in paragraphs 150(1.2)(a) to (o), and are as follows:

• (a) a trust that has been in existence for less than three months at the end of the year;
• (b) a trust that holds assets with a total fair market value that does not exceed $50,000 throughout the year, if the only assets held by the trust throughout the year are one or more of
  • (i) money (note that money does not include collectible gold or silver coins, or gold or silver bars ),
  • (ii) a debt obligation described in paragraph (a) of the definition "fully exempt interest" in subsection 212(3),
  • (iii) a share, debt obligation, or right listed on a designated stock exchange,
  • (iv) a share of the capital stock of a mutual fund corporation,
  • (v) a unit of a mutual fund trust,
  • (vi) an interest in a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a), and
  • (vii) an interest, as a beneficiary under a trust, all the units of which are listed on a designated stock exchange;
• (c) a trust that is required under the relevant rules of professional conduct or the laws of Canada or a province to hold funds for the purposes of the activity that is regulated under those rules or laws, provided it is not maintained as a separate trust for a particular client or clients ;
• (d) a trust that is a registered charity;
• (e) a trust that is a club, society or association described in paragraph 149(1)(l);
• (f) a mutual fund trust;
• (g) a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a));
• (h) a trust, all of the units of which are listed on a designated stock exchange;
• (i) a trust prescribed to be a master trust;
• (j) a graduated rate estate ;
• (k) a qualified disability trust, as defined in subsection 122(3);
• (l) an employee life and health trust;
• (m) a trust described under paragraph 81(1) (g.3);
• (n) a trust under or governed by:
  • (i) a deferred profit sharing plan,
  • (ii) a pooled registered pension plan,
  • (iii) a registered disability savings plan,
  • (iv) a registered education savings plan,
  • (v) a registered pension plan,
  • (vi) a registered retirement income fund,
  • (vii) a registered retirement savings plan,
  • (viii) a tax-free savings account,
  • (ix) an employee profit sharing plan,
  • (x) a registered supplementary unemployment benefit plan, or
  • (xi) a first home savings account; and
• (o) a cemetery care trust or a trust governed by an eligible funeral arrangement

Examples of trusts that need to file under the trust reporting rules

For examples to assist you in determining your trust reporting obligations, refer to: Question 2.7 "What are some examples of trusts that need to file under the trust reporting rule?" on the "Enhanced reporting rules for trusts and bare trusts: Frequently asked questions" page.

Bare trusts

Effective for tax years ending on or after December 31, 2023, bare trusts are subject to the trust reporting rules. However, the CRA will not require bare trusts to file a T3 return, including Schedule 15, for the 2023 and 2024 tax years, unless the CRA makes a direct request for these filings.

The term "bare trust" is not defined in the Income Tax Act. However, for income tax purposes, a bare trust is a trust arrangement under which the trustee can reasonably be considered to act as agent for all the beneficiaries under the trust regarding all dealings with all of the trust's property.

A trustee can reasonably be considered to act as agent for a beneficiary when the trustee:

For the trustee to be considered as the agent for all the beneficiaries, it would generally be necessary for the trust to consult and take instructions from each and every beneficiary regarding all dealings with all of the trust property.

A typical scenario where a bare trust arrangement can occur is when a property developer establishes a bare trust arrangement to hold registered title to real property for privacy reasons while retaining beneficial ownership.

Internal trusts of registered charities

The CRA will not require registered charities to file a T3 return for internal trusts.

Internal trusts are those created when a charity receives property as a gift that is subject to certain legally enforceable terms and conditions and holds that property as trustee of the trust. Refer to: Additional information on internal trusts of charities.

Rules for tax years ending before December 31, 2023

Trusts that must file a T3 return for a tax year when certain situations apply

All trusts (resident and non-resident) must file a T3 return for tax years in which the trust meets any of the following:

• Has tax payable
• Is requested to file
• Is a deemed resident trust
• Is resident in Canada and has either disposed of, or is deemed to have disposed of, a capital property or has a taxable capital gain (for example, a principal residence, or shares in the capital stock of a corporation)
• Is a non-resident throughout the year, and has a taxable capital gain (other than from an excluded disposition described in subsection 150(5)) or has disposed of taxable Canadian property (other than from an excluded disposition)
• Holds property that is subject to subsection 75(2) 
• Has provided a benefit of more than $100 to a beneficiary for upkeep, maintenance, or taxes for property maintained for the beneficiary’s use (for more information, see "Line 24 – Upkeep, maintenance, and taxes of a property used or occupied by a beneficiary" in the T4013 T3 Trust Guide), or
• Receives from the trust property any income, gain, or profit that is allocated to one or more beneficiaries, and the trust has any of the following :
  • Total income from all sources of more than $500
  • Income of more than $100 allocated to any single beneficiary
  • Made a distribution of capital to one or more beneficiaries
  • Allocated any portion of the income to a non-resident beneficiary

Where the trust is an estate

Generally, when someone has died, their belongings, property, assets and liabilities form their estate. An estate is considered to be a testamentary trust  that arose on and as a consequence of an individual’s death. The legal representative of the deceased person is responsible for the administration of the estate. Find out more: Represent someone who died.

An estate may continue to earn income such as investment income or receive amounts such as a death benefit from an employer. Generally, a T3 return is required to be filed if there is any gain realized or payments received by the estate after the death. Find out more: What returns you need to file - Prepare tax returns for someone who died.

Where the trust is an estate, you may not need to file a T3 return if the estate is distributed immediately after the person dies, or if the estate did not earn income before the distribution. In these cases, you should give each beneficiary a statement showing their share of the estate. Find out more: What returns you need to file - Prepare tax returns for someone who died.

You might not need to file a T3 Return if the only income after death can be reported by a beneficiary. For example, the CPP/QPP death benefit can be reported on the beneficiary's return instead of on a T3 Return. Find out more: Report income, transfers, and dispositions - Prepare tax returns for someone who died.