{"id":80582,"date":"2025-08-19T18:48:03","date_gmt":"2025-08-19T18:48:03","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/80582\/"},"modified":"2025-08-19T18:48:03","modified_gmt":"2025-08-19T18:48:03","slug":"giving-trust-beneficiary-information-to-cra-when-it-isnt-required-can-lead-to-penalty-trap","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/80582\/","title":{"rendered":"Giving trust beneficiary information to CRA when it isn\u2019t required can lead to penalty trap"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

When a trust doesn\u2019t have to file a Schedule 15 but does so anyway, the CRA discards the form, treating it as private information.Sean Kilpatrick\/The Canadian Press<\/p>\n

Taxpayers may get penalized for not reporting beneficial ownership information for a trust because they assume the Canada Revenue Agency (CRA) already has the information from a prior year.<\/p>\n

The issue arises for trusts that file a Schedule 15: Beneficial Ownership Information of a Trust in a year when the form is not required. <\/p>\n

This may occur in cases in which certain trusts are exempt from filing a Schedule 15, although they may still be required to file a T3 trust tax return. <\/p>\n

When a trust doesn\u2019t have to file a Schedule 15 but does so anyway, the CRA discards the form.<\/p>\n

\u201cThe CRA treats the ownership details on T3 Schedule 15 as private information protected by law. Because of this, the CRA does not keep or use ownership information that third parties send voluntarily,\u201d said CRA spokesperson Nina Ioussoupova in a reply to questions from The Globe and Mail sent by e-mail. <\/p>\n

The CRA notifies the taxpayer on their trust notice of assessment that the agency doesn\u2019t retain the information. <\/p>\n

However, if in a subsequent tax year that trust is no longer exempt from filing the Schedule 15, the taxpayer could be hit with penalties if they file the form but don\u2019t provide complete information.<\/p>\n

Part A of the form asks the taxpayer if the trust is filing the Schedule 15 for the first time and if the beneficial information for the trust has changed since it was last reported.<\/p>\n

If the answer to both questions is no, the form indicates the CRA will carry forward the previously reported beneficial ownership information, and that the form is thus complete. <\/p>\n

However, if a filed Schedule 15 doesn\u2019t include complete beneficial ownership information \u2013 and the CRA discarded the form from a previous year because it wasn\u2019t required \u2013 a penalty may be assessed even if the taxpayer filed the form on time.<\/p>\n

The penalty for failing to file a completed Schedule 15 on time is $25 a day, with a minimum penalty of $100 and a maximum of $2,500.<\/p>\n

\u201cThe CRA is adopting a penalty stance when it comes to this, not an education-first approach,\u201d says Ryan Minor, director of tax with CPA Canada.<\/p>\n

Effective for 2023 and subsequent tax years, the federal government introduced expanded reporting rules for trusts. Ottawa wanted more information about trusts to help in its broader fight against tax evasion and aggressive tax planning.<\/p>\n

More trusts are now required to file an annual T3 trust return and an accompanying Schedule 15, a new form introduced with the expanded rules. On the Schedule 15, the taxpayer must provide the names, birth dates, country of residence and tax identification numbers (e.g. social insurance number) of the trust\u2019s settlors, trustees, beneficiaries and controlling persons.<\/p>\n

However, certain \u201clisted trusts\u201d are exempt from filing a Schedule 15, although they may still have a requirement to file a T3 trust tax return. Listed trusts can include a trust that has existed for less than three months at the end of its first tax year, or a trust holding assets with a total fair market value of $50,000 or less throughout the year, subject to certain conditions.<\/p>\n

A listed trust may stop being a listed trust in a subsequent year and would therefore have to file a Schedule 15. For example, a trust that wasn\u2019t required to file a Schedule 15 in one tax year because it had existed for less than three months would have to file the Schedule 15 in the next year when it would have existed for the entire period.<\/p>\n

To avoid issues and potential penalties, the CRA advises taxpayers and tax advisors to ensure the Schedule 15 is filed on time and is fully completed, Ms. Ioussoupova said.<\/p>\n

The CRA also suggests taxpayers and their advisors review the trust notice of assessment carefully, she said, \u201cas it may contain important information regarding the status of the return and any applicable penalties or requirements.\u201d <\/p>\n

CRA corrects Schedule 15 glitch<\/p>\n

At the beginning of the 2025 tax-filing season, the CRA assessed penalties for some trusts that failed to file a Schedule 15 even when those trusts weren\u2019t required to file the form, Ms. Ioussoupova said.<\/p>\n

The issue arose in a \u201csmall number of cases,\u201d she said, and \u201cthe CRA\u2019s systems were quickly corrected, and all affected assessments were identified and corrected.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: When a trust doesn\u2019t have to file a Schedule 15 but does so…\n","protected":false},"author":2,"featured_media":80583,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[21366,64,63,99,186,61229,184,185],"class_list":{"0":"post-80582","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-appwebview","9":"tag-au","10":"tag-australia","11":"tag-business","12":"tag-finance","13":"tag-globe-advisor","14":"tag-personal-finance","15":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/80582","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=80582"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/80582\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/80583"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=80582"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=80582"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=80582"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}