How to file a T3 return

New reporting requirements for T3 returns

All trusts, unless specific conditions are met, must file a T3 return for tax years ending after December 30, 2023. Many trusts, including bare trusts, will need to file for the first time.

Refer to: New trust reporting requirements for T3 returns FAQ

If you need a trust account number, visit our Trust Account Registration online service within:

Methods to file

Efile: Option 1

You have the option to file the following T3 returns using Efile:

For more information about this filing method, go to EFILE for electronic filers.

T3 EFILE exclusions

You cannot file a Trust return electronically in any of the following situations, any related schedules, and forms listed below:

  • The return is an amended T3 trust return.
  • The return is for a tax year that ends before 2021.
  • The trust does not have a trust account number.
  • The trust is filing Form RC199, Voluntary Disclosures Program (VDP) Taxpayer Agreement, or the taxpayer is making a request under the Voluntary Disclosures Program.
  • Form T1273, Statement A - Harmonized AgriStability and AgriInvest Programs Information and Statement of Farming Activities for Individuals and Form T1163, Statement A - AgriStability and AgriInvest Programs Information and Statement of Farming Activities for Individuals are excluded from T3 EFILE.
  • T3 NB-SBI, T3 New Brunswick Small Business Investor Tax Credit.
  • T3SK CG, Saskatchewan Farm and Small Business Capital Gains Tax Credit (Trusts).
  • T3PFT, T3 Provincial or Territorial Foreign Tax Credit for Trusts.
  • Business income tax paid to more than 3 foreign countries on Form T3FFT, T3 Federal Foreign Tax Credits for Trusts.
  • Non-business income tax paid to more than 3 foreign countries on Form T3FFT, T3 Federal Foreign Tax Credits for Trusts.
  • More than 12 Selected Financial Data (SFD) records.
  • A claim for Return of fuel charge proceeds to farmers tax credit for a 2021 tax year.
  • A claim for Yukon Business Carbon Price Rebate for a 2021 tax year.
  • Trusts claiming bankruptcy in the year.
  • Trusts filing Form T2223, election, under subsection 159(6.1) of the income tax act, by a trust to defer payment of income tax.
Eligibility for Internet file transfer

Internet file transfer is available to most taxpayers and tax preparation service providers when a trust's taxable income and tax payable are $0.00.

Restrictions for Internet file transfer

You cannot use Internet file transfer to file a trust return if:

  • The return is an amended tax return
  • The return is for a tax year that ends before 2017
  • The trust does not have a trust account number or cannot provide one in the electronic file
Before you file with Internet file transfer

Before filing with Internet file transfer, the trust's identification information must be up to date. You cannot use Internet file transfer to change identification information, such as the trust's:

  • name
  • legal representative (trustee, executor, administrator, or liquidator)
  • address for the legal representative
  • alternate mailing address, if different from the address for the legal representative
  • direct-deposit information (nor can direct deposit be requested)
Web access code for Internet file transfer

To file a T3 return online using Internet file transfer, you will need a web access code (WAC). If you have a WAC that was issued to file your trust-related information returns, you can use that one. If you have misplaced or do not have a WAC, go to Web access code to use our online service. If you cannot access your WAC online or want to change it, call the Business Enquiries line at 1-800-959-5525.

Web access code for Internet file transfer
  1. Download the schema or use your software to create and save your return in XML format. If your file size is more than 150 MB, you may have to send fewer returns per file.
  2. Make sure you have your web access code and your trust account number. If you do not have your web access code, you can get one at Web access code.
  3. To submit electronically, go to Internet file transfer (XML).

By Mail: Option 1

Send any of the T3 return listed above by mail to the appropriate tax centre. For more information, go to Where to file a T3 return.

Supporting documentation for online filing

In this part, all elections, designations, agreements, waivers, and special elective returns are referred to as elections.

Elections and supporting documentation

The Income Tax Act provides for various elections to be made. Some are made on authorized Canada Revenue Agency (CRA) forms. Others are made by providing specific information in a letter or note.

Elections and Form T1135, Foreign Income Verification Statement, have to be sent only if they apply to the return you filed. You do not have to send any other supporting document when filing online. Keep all documents used to prepare a return, such as books, records, forms, schedules, and receipts for six years. Be ready to send your documents to the CRA on request.

All elections, including the supporting documentation, must be submitted to the CRA in writing or through the Submit documents online service. For an election to be considered valid, it must be submitted by the due date established in the Income Tax Act.

When submitting this documentation:

All other documentation used to prepare the return, excluding elections as indicated, is to be kept and sent to the CRA only if requested.

For more information on other documents available for electronic filing, see Submitting and filing documents online related to T3.

Where to send supporting paper documents

With the exception of Form T1135, all paper documentation to support elections should be sent to the tax centre that serves the area where the legal representative lives. Each election form and letter should include the trust's name, representative's name, address, and trust account number. A covering letter should also be included that indicates the documentation is to support the trust's electronically filed return.

Send your completed Form T1135, Foreign Income Verification Statement, to the tax centre address shown on the form.

Beneficial Ownership Legislation

New legislation in Bill C-32 received Royal Assent on December 15, 2022. The beneficial ownership reporting requirements are effective for taxation years ending after December 30, 2023. For 2023 and subsequent taxation years, all non-resident trusts that currently have to file a T3 return and all express trusts that are resident in Canada, with some exceptions, will have to provide additional information on an annual basis. An express trust is generally a trust created with the settlor's express intent, usually made in writing. As a result, for the 2023 and subsequent taxation years, certain trusts will have to file a T3 return where currently they do not have to file a T3 return.

Exceptions from having to provide additional information

The following types of trusts (that are either resident in Canada, or non-resident but required to file a T3 return) are not required to provide additional information:

  • mutual fund trusts, segregated funds and master trusts
  • trusts governed by registered plans (i.e., deferred profit sharing plans, pooled registered pension plans, registered disability savings plans, registered education savings plans, registered pension plans, registered retirement income funds, registered retirement savings plans, registered supplementary unemployment benefit plans and tax free savings accounts)
  • lawyers' general trust accounts
  • graduated rate estates and qualified disability trusts
  • trusts that qualify as non-profit organizations or registered charities
  • trusts that have been in existence for less than three months
  • trusts that hold less than $50,000 in assets throughout the taxation year (provided that their holdings are confined to deposits, government debt obligations and listed securities)
Additional information that will have to be provided
  • the identity of all trustees
  • beneficiaries and settlors of the trust
  • each person who has the ability (through the trust terms or a related agreement) to exert control or override trustee decisions over the appointment of income or capital of the trust (e.g., a protector)

This change is being made to improve the collection of beneficial ownership information with respect to trusts.

What is an express trust?

An express trust is generally a trust created deliberately (with express intent), by a settlor, usually in writing.

It is accepted at common law that an express trust cannot be established unless three certainties are present, namely the certainty of:
  • the intent to create a trust;
  • the property to be placed in trust; and
  • the identity of the beneficiaries of the trust.

A settlor intends to set up a trust transfers property to the trust and identifies a beneficiary or beneficiaries.

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