Trusts should determine whether they may have to report additional information under proposed changes that are expected to apply soon. Finance released amended draft legislation on August 9, 2022 to require the disclosure of certain information on each trustee, beneficiary, settlor and protector of the trust, subject to limited exceptions. As a result of this change, which is set to apply for taxation years ending after December 30, 2022, more trusts will also have to file an annual income tax return.
Affected trusts should take action now and prepare to meet these requirements, as they will likely need to provide this information in their 2022 tax return. Finance’s revised draft legislation is largely similar to previous draft legislation that it released earlier this year. However, it clarifies reporting requirements in cases of certain trusts that have some (but not all) of their units publicly listed and excludes certain additional trusts from the rules, among other changes. Notably, the revised legislation does not include any changes related to bare trusts, which are still subject to the new rules.
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