CRA's Updated Guidance on Penalty Relief for T3 Bare Trusts

On March 12, 2024, the Canada Revenue Agency (CRA) updated their New trust reporting requirements for T3 returns FAQ page to provide new guidance on penalty relief for T3 2023 bare trust returns. 

• The CRA will waive the penalty for the 2023 tax year in situations where the T3 return and Schedule 15 are filed after the filing deadline of April 2, 2024, for reasons other than gross negligence.
• The CRA will only apply the gross negligence penalty in the most egregious cases where a bare trust fails to file. A gross negligence penalty for failing to file will be subject to oversight and approval by the CRA Headquarters, following a mandatory referral.
• Penalty relief for the 2023 filing year is only applicable to bare trusts. This is because bare trusts did not have an obligation to file a T3 return in years prior, and the 2023 tax year will be the first time that bare trusts will have a requirement to file a T3 return including the new Schedule 15. 

To learn more about the CRA’s updated guidance, read questions 3.5 and 3.6 on the CRA’s T3 FAQ page.