Trust types and codes

A GRE, of an individual at any time, is the estate that arose on and as a consequence of the individual's death, if all of the following conditions are met:

• that time is no more than 36 months after the death of the individual
• the estate is at that time a testamentary trust
• the individual's social insurance number (SIN) is provided in the estate's T3 return for the tax year that includes that time and for each of its earlier tax years that ended after 2015 (36 month period after the death of the individual)
• the estate designates itself as the GRE of that individual in its T3 return for its first tax year that ends after 2015
• no other estate designates itself as the GRE of that individual in a T3 return for a tax year that ends after 2015

An estate can only be a GRE for up to 36 months following the death of an individual. The estate will cease to be a GRE if it is still in existence at the end of the 36 month period.

This is a trust that is at any particular time a lifetime benefit trust with respect to a taxpayer and the estate of a deceased individual if both of the following conditions are met:

• immediately before the death of the deceased individual, the taxpayer meets one of the following conditions:
  • was both a spouse or common-law partner of the deceased individual and mentally infirm
  • was both a child or grandchild of the deceased individual and dependent of the deceased individual for support because of mental infirmity
• the trust is, at the particular time, a personal trust under which:
  • no person other than the taxpayer may receive or otherwise obtain the use of, during the taxpayer’s lifetime, any of the income or capital of the trust
  • the trustees:
    • are empowered to pay amounts from the trust to the taxpayer
    • are required in determining whether to pay, or not to pay, an amount to the taxpayer to consider the needs of the taxpayer including, without limiting the generality of the foregoing, the comfort, care and maintenance of the taxpayer

A QDT for a tax year is a testamentary trust that arose on the death of a particular individual that jointly elects (using Form T3QDT, Joint Elections for a Trust to be a Qualified Disability Trust), with one or more beneficiaries under the trust, in its T3 return for the year to be QDT for the year. In addition, all of the following conditions have to be satisfied:

• the election must include each electing beneficiary’s social insurance number
• each electing beneficiary must be named as a beneficiary by the particular individual in the instrument under which the trust is created
• each electing beneficiary must, for the beneficiary’s tax year in which the trust’s year-ends, be eligible for the disability tax credit
• no beneficiary who elects with the trust to be a QDT for the year can elect with any other trust for the other trust to be a QDT for the other trust’s tax year that ends in the beneficiary’s tax year
• the trust must be factually resident in Canada (that is a resident in Canada without regard to section 94 of the Act)
• the trust is not subject to the recovery tax for the year

For a trust that was a QDT in a previous tax year, read the section Line 11 - Federal recovery tax in Guide T4013, T3 Trust Guide.

Post-1971 spousal or common-law partner trust

Includes both a testamentary trust created after 1971, and an inter vivos trust created after June 17, 1971. In either case, the living beneficiary spouse or common-law partner is entitled to receive all the income that may arise during the lifetime of the spouse or common-law partner. That spouse or common-law partner is the only person who can receive, or get the use of, any income or capital of the trust during their lifetime.

Pre-1972 spousal trust

Includes both a testamentary trust created before 1972, and an inter vivos trust created before June 18, 1971. In either case, the beneficiary spouse was entitled to receive all the income during the spouse's lifetime, and no other person received, or got the use of, any income or capital of the trust. These conditions must be met for the period beginning on the day the trust was created, up to the earliest of the following dates:

• the day the beneficiary spouse dies
• January 1, 1993
• the day on which the definition of a pre-1972 spousal trust is applied

This is a trust created after 1999 by a settlor who was 65 years of age or older at the time the trust was created, for which the settlor is entitled to receive all the income that may arise during their lifetime, and is the only person who can receive, or get the use of, any income or capital of the trust during the settlor's lifetime. A trust will not be considered an alter ego trust if it so elects in its T3 return for its first tax year.

The term “bare trust” is not defined in the Act. A “trust” for the purposes of the Act is defined in subsection 104(1) of the Act. That subsection provides that, if the arrangement is one in which the trust can reasonably be considered to act as agent for all the beneficiaries under the trust with respect to all dealings with all of the trust’s property and the trust is not a trust described in paragraphs (a) to (e.1) of the definition of “trust” in subsection 108(1) of the Act, the arrangement is deemed not to be a trust for the purposes of the Act, with certain exceptions. These arrangements are generally known as “bare trusts”.

A trustee can reasonably be considered to act as agent for a beneficiary when the trustee has no significant powers or responsibilities, the trustee can take no action without instructions from that beneficiary and the trustee’s only function is to hold legal title to the property. In order for the trustee to be considered as the agent for all the beneficiaries of a trust, it would generally be necessary for the trust to consult and take instructions from each and every beneficiary with respect to all dealings with all of the trust property.

Based on proposed C-15, the CRA does not expect bare trusts to file a T3 Trust Income Tax and Information Return (T3 return) including Beneficial Ownership Information of a Trust (Schedule 15) for taxation years ending in 2025. Certain bare trusts will be required to file for taxation years ending on or after December 31, 2026. 

These are inter vivos trusts under paragraph 81(1)(g.3) of the Act and are government funded trusts.

• established under one of the following agreements:
  • the 1986-1990 Hepatitis C Settlement Agreement entered into by Her Majesty in right of Canada or in right of a province
  • the Pre-1986/Post-1990 Hepatitis C Settlement Agreement entered into by Her Majesty in right of Canada
  • the May 8, 2006 Indian Residential Schools Settlement Agreement entered into by Her Majesty in right of Canada 
  • the December 22, 2021, Safe Drinking Water for First Nations Class Action Settlement Agreement entered into by Her Majesty in right of Canada
  • the January 18, 2023, Indian Residential Schools Settlement Agreement entered into by His Majesty in right of Canada
  • the April 19, 2023, First Nations Child and Family Services, Jordan’s Principle and Trout Class Settlement Agreement entered into by His Majesty in right of Canada

As long as no contribution to the trust, other than contributions provided for under the Agreement, is made before the end of a tax year of the trust, the trust’s income is generally exempt from income tax for that tax year.

The CRA considers a trust to exist when a congregation meets all of the following conditions:

• it has members who live and work together
• it follows the practices and beliefs of, and operates according to the principles of, the religious organization of which it is a part
• it does not permit its members to own property in their own right
• it requires that its members devote their working lives to the congregation's activities
• it carries on one or more businesses directly, or owns all of the shares of the capital stock of a corporation (except directors' qualifying shares), or every interest in a trust or another person that carries on the business to support or sustain its members or the members of another congregation

The communal organization has to pay tax as though it were an inter vivos trust. However, it can elect to allocate its income to the beneficiaries. For more information, go to Information Circular IC78-5R3 Communal Organizations.

A trust is deemed resident in Canada where there is one of the following:

• a resident contributor
• a resident beneficiary under the trust

A "resident contributor" to a trust at a particular time means a person that is, at that time, resident in Canada and has at or before that time made a contribution to the trust. 

A "resident beneficiary" under a trust at a particular time is a person (other than an "exempt person" or "successor beneficiary") that, at that time is a beneficiary under the trust, is resident in Canada, and there is a "connected contributor" to the trust.

A "connected contributor" is a person who made a contribution either while resident in Canada, within 60-months of moving to Canada, or within 60-months of leaving Canada.

For tax years that ended before February 11, 2014, individuals who had been resident in Canada for a period of, (or periods the total of which is) 60 months or less were exempted from treatment as resident contributors or connected contributors. This exemption also applies to the tax years of non-resident trusts that end before 2015 if all of the following conditions are met:

• no contributions were made to the trust after February 10, 2014 and before 2015
• at any time that is after 2013 and before February 11, 2014, the 60 month exemption applied in respect of the trust

These trusts are deemed resident for several purposes including:

• filing income tax returns and paying income tax under Part 1 of the Act
• withholding tax on amounts paid to non-residents under Part XIII
• certain filing obligations relating to ownership of foreign property, money received from or given to foreign entities

The trusts are not considered a resident for calculating a Canadian's liability when paying the trust (that is, when a resident taxpayer pays the deemed resident trust it is required to withhold Part XIII). They are also not considered resident for the purpose a determining a Canadian resident's (other than the trust) foreign reporting requirements.

If you need help determining whether the trust is a deemed resident of Canada, contact us.

Generally, this is any arrangement under which an employer makes contributions to a custodian, and under which one or more payments will be made to, or for the benefit of, employees, former employees, or persons related to them.

For more information, and for details on what the CRA considers to be an employee benefit plan and how it is taxed, go to IT502 ARCHIVED – Employee Benefit Plans and Employee Trusts and its Special Release (IT-502SR).

Because the allocations are taxed as income from employment to the beneficiaries, report the allocations on a T4 slip, not on a T3 slip. For more information, go to Guide RC4120, Employers' Guide – Filing the T4 Slip and Summary.

This is a trust, established by one or more employers, that meets a number of conditions under subsection 144.1(2) of the Act. The trust's only purpose is the payment of a designated employee benefit (DEBs) for employees and certain related persons (certain limitations apply to the rights and benefits that may be provided to key employees).

Employers can deduct contributions made to the trust, as long as they are for DEBs and meet the conditions in subsection 144.1(4). Employee contributions are permitted, but are not deductible. However, employee contributions may qualify for the medical expense tax credit, to the extent that they are made to a private health services plan.

The trust can deduct amounts paid to employees or former employees for DEBs and can generally carry non-capital losses back or forward three years. Any amount received from an ELHT must be included in income, unless the amount was received as the payment of a DEB. Payments of DEBs to current or former non-resident employees will generally not be subject to tax under Part XIII.

For more information on ELHT's, DEBs and key employees, go to section 144.1 of the Act.

This is a trust. Generally, it is an arrangement established after 1979, under which an employer makes payments to a trustee in trust for the sole benefit of the employees. The trustee has to elect to qualify the arrangement as an employee trust on the trust's first T3 return. The employer can deduct contributions to the plan only if the trust has made this election and filed it no later than 90 days after the end of its first tax year. To maintain its employee trust status, each year the trust has to allocate to its beneficiaries all non-business income for that year, and employer contributions made in the year. Business income cannot be allocated and is taxed in the trust.

For more information, go to IT502 ARCHIVED – Employee Benefit Plans and Employee Trusts and its Special Release (IT-502SR).

Because the allocations are taxed as income from employment to the beneficiaries, report the allocations on a T4 slip, not on a T3 slip. For more information, go to Guide RC4120, Employers' Guide – Filing the T4 Slip and Summary.

A trust under paragraph 149(1)(z.1) of the Act. This is a trust that was created because of a requirement imposed by section 56 of the Environment Quality Act, R.S.Q., c. Q-2. The trust must meet both of the following conditions:

• the trust is resident in Canada
• the only persons that are beneficially interested are one of the following:
  • Her Majesty in right of Canada
  • Her Majesty in right of a province
  • a municipality (as defined in section 1 of the Environment Quality Act) that is exempt from tax on all of its taxable income under Part 1 of the Act because of subsection 149(1)

An FHSA trust has to file a T3 return if the trust meets one of the following conditions:

• If the trust carried on a business or held non-qualified investments during the tax year, the trust will be taxable to the extent of the income earned from that business or those investments. For this type of trust code 342 must be entered on the T3 return. For more information, read the section Line 11 – Non-qualified investments by TFSA, RRSP, RRIF, RDSP, RESP and FHSA trusts, or disposition of interest in a partnership reported under subsection 100(1.1) of the Act in Guide T4013, T3 Trust Guide.
• When the last holder of an FHSA dies, and the trust still exists after the exempt period, it is deemed to dispose of all its property at fair market value and immediately reacquire it at the same value on January 1 following the end of the exempt period. The trust loses its FHSA status, becomes a taxable inter vivos trust from that point on and is subject to the normal rules for inter vivos trusts. For more information, go to First Home Savings Account (FHSA).

This is a related segregated fund, as defined in paragraph 138.1(1)(a), of a life insurer for life insurance policies and is considered to be an inter vivos trust. The fund's property and income are considered to be the property and income of the trust, with the life insurer as the trustee.

This is a trust created after 1999 by a settlor who was 65 years of age or older at the time the trust was created. The settlor and the settlor's spouse or common-law partner are entitled to receive all the income that may arise from the trust before the later of their deaths. They are the only persons who can receive, or get the use of, any income or capital of the trust before the later of their deaths.

The term “land settlement trust” is not defined in the Act. Generally, a land settlement trust is a trust created to hold the settlement funds paid for a First Nation’s land claim.

This is a trust. A trust can elect to be a master trust if during the entire time since its creation it met all of the following conditions:

• it was resident in Canada
• its only undertaking was the investing of its funds
• it never borrowed money except for a term of 90 days or less (for this purpose, the borrowing cannot be part of a series of loans or other transactions and repayments)
• it has never accepted deposits
• each of its beneficiaries is a trust governed by a deferred profit sharing plan, a pooled registered pension plan or a registered pension plan

This is a unit trust that resides in Canada. It also has to comply with the other conditions of the Act, as outlined in section 132, and the conditions established by section 4801 of the Income Tax Regulation. For a mutual fund trust that is a public trust, or public investment trust, there are certain reporting requirements these types of trusts must meet. For more information, go to Trust types and codes. 

This is an organization (for example, club, society, or association) that is usually organized and operated exclusively for social welfare, civic improvement, pleasure, recreation, or any other purpose except profit. The organization will generally be exempt from tax if no part of its income is payable to, or available for, the personal benefit of a proprietor, member, or shareholder. For more information, go to IT496R ARCHIVED – Non-Profit Organizations.

If the main purpose of the organization is to provide services such as dining, recreational, or sporting facilities to its members, the CRA considers it to be a trust. In this case, the trust is taxable on its income from property, and on any taxable capital gains from the disposition of any property that is not used to provide those services. The trust is allowed a deduction of $2,000 when calculating its taxable income. Claim this on line 38 of the T3 return.

For more information, go to IT83R3 ARCHIVED – Non-profit organizations – Taxation of income from property.

A trust under paragraph 149(1)(z.2) of the Act. This is a trust that was created because of a requirement imposed by subsection 9(1) of the Nuclear Fuel Waste Act. The trust must meet both of the following conditions:

• the trust is resident in Canada
• the only persons that are beneficially interested are one of the following:
  1. Her Majesty in right of Canada
  2. Her Majesty in right of a province
  3. a nuclear energy corporation (as defined in section 2 of the Nuclear Fuel Waste Act) if all the shares of its capital stock of which are owned by one or more persons described in clause (a) or (b) above
  4. the waste management organization established under section 6 of the Nuclear Fuel Waste Act if all shares of its capital stock are owned by one or more nuclear energy corporations described in clause (c) above
  5. Atomic Energy of Canada Limited, being the company incorporated or acquired in accordance with subsection 10(2) of the Atomic Energy Control Act

This is a trust (other than a trust that is, or was at any time after 1999, a unit trust) that is one of the following:

• a graduated rate estate (GRE)
• a trust in which no beneficial interest was acquired for consideration payable directly or indirectly to:
  • a. the trust
  • b. any person or partnership that has made a contribution to the trust by way of transfer, assignment or other disposition of property

For 2016 and later tax years, only a GRE automatically qualifies as a personal trust without regard to the circumstances in which beneficial interest in the trust has been acquired.

PRPPs must operate through an arrangement acceptable to the Minister. All property held in connection with a PRPP is required to be held in trust by the administrator on behalf of the plan members. As a result, a PRPP is generally treated as a trust for tax purposes, the administrator is the trustee of that trust, the members are the beneficiaries, and the trust property is the property held in connection with the plan. A PRPP trust will be excluded for purposes of the 21 year deemed disposition rules and other specified measures. When certain criteria are met, a PRPP trust will be exempt from Part 1 tax.

For more information, go to Pooled Registered Pension Plans (PRPP).

Generally, this is a trust resident in Canada with a trustee that is either the Crown or a corporation resident in Canada that is licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee. The trust is maintained for the sole purpose of funding the reclamation of a qualifying site in Canada that had been used primarily for, or for any combination of:

• the operation of a mine
• the extraction of clay, peat, sand, shale or aggregates (including dimension stone and gravel)
• the deposit of waste
• the operation of a pipeline if the trust was created after 2011, as long as the other requirements defined in subsection 211.6(1) of the Act are met

The trust is, or may become, required to be maintained under the terms of a contract entered into with the Crown or if the trust was established after 2011, by an order of a tribunal constituted under a federal or provincial law. Certain conditions exist that may exclude a trust from being a QET.

For more information, read the definition of a qualifying environmental trust in subsection 211.6 (1).

A trust is a REIT for a particular tax year, if it is resident in Canada throughout the year and meets a number of other conditions, including all of the following:

•  at least 90% of the trust’s non-portfolio properties must be qualified REIT properties
•  at least 90% of the trust’s gross REIT revenue for the tax year must be derived from rent, from real properties, interest, capital gains from dispositions of real properties which are capital properties, dispositions of eligible resale properties, dividends and royalties
•  at least 75% of the trust’s gross REIT revenues for the tax year must be derived from rent from real properties, interest from mortgages on real properties and capital gains from dispositions of real properties which are capital properties

An RDSP trust has to file a T3 return if the trust has borrowed money and subparagraph 146.4(5)(a)(i) or 146.4(5)(a)(ii) of the Act applies. If this does not apply and the trust carried on a business or held non-qualified investments during the tax year, you have to fill out a T3 return to calculate the taxable income from the business or non-qualified investments, determined under subsection 146.4(5). If the trust is reporting capital gains or losses, it has to report the full amount (that is, 100%) on line 1 of the T3 return. 

If an RESP trust held non-qualified investments during the tax year, you have to file a T3 return to calculate the taxable income from-non-qualified investments, determined under subsection 146.1(5) of the Act. If the trust is reporting capital gains or losses, it has to report the full amount (that is, 100%) on line 1 of the T3 return.

An RRSP, or RRIF trust has to file a T3 return if the trust meets one of the following conditions:

• the trust has borrowed money and paragraph 146(4)(a) or 146.3(3)(a) of the Act applies
• the RRIF trust received a gift of property and paragraph 146.3(3)(b) of the Act applies
• the last annuitant has died and paragraph 146(4)(c) or subsection 146.3(3.1) of the Act applies. If this is the case, claim an amount on line 47 of the T3 return only if the allocated amounts were paid in accordance with paragraph 104(6)(a.2) 

If the trust does not meet one of the above conditions and held non-qualified investments during the tax year, you have to fill out a T3 return to calculate the taxable income from non-qualified investments, determined under subsection 146(10.1) or 146.3(9). If the trust is reporting capital gains or losses, it has to report the full amount (that is, 100%) on line 1 of the T3 return.

If the trust does not meet one of the above conditions and the trust carried on a business, you have to fill out a T3 return to calculate the taxable income of the trust from carrying on a business. Do not include the business income earned from qualified investments for the trust, or from the disposition of qualified investements for the trust.

This arrangement exists when an employer makes contributions for an employee's retirement, termination of employment, or any significant change in the services of employment. For more information, go to Retirement Compensation Arrangements.

Generally, this is a plan or arrangement (whether funded or not) between an employer and an employee or another person who has a right to receive salary or wages in a year after the services have been performed. For more information, go to IT529 ARCHIVED – Flexible Employee Benefit Programs.

This is a trust (other than a trust that is a real estate investment trust for the tax year or an entity that is an excluded subsidiary entity) that meets all of the following conditions at any time during the tax year:

• the trust is resident in Canada
• investments in the trust are listed or traded on a stock exchange or other public market
• the trust holds one or more non-portfolio properties

For more information, go to Specified investment flow-through (SIFT) trust income and distribution tax.

This is a trust that is one of the following:

• an amateur athlete trust
• an employee life and health trust
• an employee trust
• a master trust
• a trust governed by:
  • a deferred profit sharing plan
  • an employee benefit plan
  • an employee profit-sharing plan
  • a foreign retirement arrangement
  •  a pooled registered pension plan
  • a registered disability savings plan
  • a registered education savings plan
  • a registered pension plan
  • a registered retirement income fund
  • a registered retirement savings plan
  • a registered supplementary unemployment benefit plan
• a tax-free savings account trust
• a related segregated fund trust
• a retirement compensation arrangement trust
• a trust whose direct beneficiaries are one of the above mentioned trusts
• a trust governed by:
  • an eligible funeral arrangement or a cemetery care trust
  • a communal organization
  • a trust where all or substantially all of the property is held for the purpose of providing benefits to individuals from employment or former employment
• Spousal or common-law partner trust

Post-1971 spousal or common-law partner trust

Includes both a testamentary trust created after 1971, and an inter vivos trust created after June 17, 1971. In either case, the living beneficiary spouse or common-law partner is entitled to receive all the income that may arise during the lifetime of the spouse or common-law partner. That spouse or common-law partner is the only person who can receive, or get the use of, any income or capital of the trust during their lifetime.

Pre-1972 spousal trust

Includes both a testamentary trust created before 1972, and an inter vivos trust created before June 18, 1971. In either case, the beneficiary spouse was entitled to receive all the income during the spouse's lifetime, and no other person received, or got the use of, any income or capital of the trust. These conditions must be met for the period beginning on the day the trust was created, up to the earliest of the following dates:

• the day the beneficiary spouse dies
• January 1, 1993
• the day on which the definition of a pre-1972 spousal trust is applied

A TFSA trust has to file a T3 return if the trust meets one of the following conditions:

• If a TFSA trust carried on a business or held non-qualified investments during the tax year, the trust will be taxable to the extent of the income earned from that business or those investments (type of trust code 320 on the T3 Return). For more information, read Line 11 – Non-qualified investments for TFSA, RRSP, RRIF, RDSP, RESP, and FHSA trust, or disposition of interest in a partnership reported under subsection 100(1.1) of the Act in Guide T4013, T3 Trust Guide.
• When the last holder of a TFSA dies, and the trust still exists after the exempt period, it is deemed to dispose of all its property at fair market value and immediately reacquire it at the same value on January 1 following the end of the exempt period. The trust loses its TFSA status, becomes a taxable inter vivos trust from that point on (type of trust code 318 on the T3 return) and is subject to the normal rules for inter vivos trusts. Additionally, in its first year as a taxable inter vivos trust, the trust is taxable on any income and gains earned but not distributed during the exempt period. For more information go to Death of a tax-free savings account holder.

This is a trust for which the interest of each beneficiary can be described at any time by referring to units of the trust. A unit trust must also meet one of the three conditions described in subsection 108(2) of the Act.

A public trust, is at any time, a mutual fund trust of which its units are listed, at that time, on a designated stock exchange in Canada.

A public investment trust, is at any time, a trust that is a public trust, where all or substantially all of the fair market value of the property is, at that time, attributable to the fair market value of property of the trust that is:

• units of public trusts
• partnership interests in public partnerships
• shares of the capital stock of public corporations
• any combination of those properties