Canada's New 'Bare Trust' Reporting Rules Are Here
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- Опубліковано 14 чер 2024
- ➡️Clearline CPA: www.clearlinecpa.ca/
➡️Additional Info: www.canada.ca/en/revenue-agen...
➡️Temporary Relief: www.advisor.ca/tax/estate-pla...
In this video we have Shane Schepens on from Clearline CPA to discuss bare trusts, and the new reporting rules that CRA has put in place for the 2023 tax year.
If you have any further questions about this video's topic or any financial planning questions in general, I encourage you to find a certified financial planner in your area or book a consultation with us to get your retirement plan on track. You can learn more about our services at www.parallelwealth.com/planning
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0:00 - Intro
0:23 - What Is A Bare Trust?
1:32 - Common Personal Scenarios
3:50 - Common Business Scenarios
5:50 - Scenarios That Don't Apply
9:04 - Penalties For Failure To Report
10:08 - Shane's Personal Scenario
This presentation is intended for information purposes only and does not constitute an offer to buy or sell our products or services nor is it intended as investment and/or financial advice on any subject matter. Every effort has been made to ensure the accuracy of its contents. Certain of the statements made may contain forward-looking statements, which involve known and unknown risk, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Returns are not guaranteed and past performance may not be repeated.
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www.canada.ca/en/revenue-agen...
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for....
@Elijah-Brian That's actually quite impressive, I could use some Info on your FA, I am looking to make a change on my finances this year as well
@Elijah-Brian I will give this a look, thanks a bunch for sharing.
Governments now should be working to reduce the burden on tax payers. It’s gone too far
Liberal party, squeezing average Canadians with extra paper work and taxes while they ignore 54 mill they mismanaged on ArriveCan app.... 😅
What does one have to do with the other? The CPC was responsible for the Phoenix debacle, is that relevant?
@@ColdRunnerGWN agree with you. I posted my reply to the wrong comment. Yeah not sure whats with the liberal blame comment. They will blame liberals if they have a flat tire.
@@ColdRunnerGWNThere is no relation, but it doesn't mean that this idiotic bureaucratic extra paper work makes any sense. In the same way as many other liberal ideas. It would be really nice, if it applies only to liberal voters, who I am sure love it.
@@neilnewinger3059 - You must either be too young to remember any other governments, or you just hibernate when the Conservatives get into power. I'm 54 and I can't think of a single time that any government reduced paperwork. They all just add to it.
@@ColdRunnerGWN Of course they all do it, because Canadians just love to pay taxes for all their invaluable services, privileges, carbon print, CBC,, vacations, lavish pensions, arrive Canada software, ,,,, So why would Canadians not want to pay even thousands of dollars in fees and fines for nonsensical paper work on top of it? If one party does it, why shouldn't we give the same opportunity to other parties to do it as well, right?
Hey Adam, I think you should do a follow up with more clear information about this. I called CRA today and they passed me to 4 different agents who really had no clear answers or didn't even know what I was talking about. The last one told me that a Bare Trust is provincial and that I should call Service Ontario for answers.
I did my own search and the information I found stated that a joint GIC and a joint bank account with an adult child are not considered a bare trusts. The agent did read the definition of the Bare Trust and she stressed that in a Bare Trust the beneficiary has complete control over the trustee’s actions related to the trust property, and the trustee has no independent power or discretion over the property. This is not the case with joint accounts. So basically, we are left guessing about what to do on our taxes this year!
Please Help us understand this...
I agree that a follow-up video offering clarification would be prudent. In a joint account with a parent where the child has authority to manage the funds as though they were their own doesn't align with the CRA definition of a bare trust. The child is a joint owner and not an agent. Hopefully the CRA provides clarification in the near future.
that doesn't surprise me, unfortunately, that the govt reps are confused
The call agents are worse than useless; they are so incompetent that they will sometimes give you false information that later get proven wrong in a tax review. Don't waste your time; if the financial impact is large enough go pay a professional. Unfortunately, free advice is bad advice because you get what you pay for.
I smell mistakes incoming. Lots of them.
lol. What do most cra agents know about tax? They are lucky to remember that they work for cra on a good day. Best to talk to a CPA.
Imagine if on April 29, the government announced they were canceling the need to file income taxes. But those that already paid their accountant to file, oh well.
With announcing on March 28th, 2024 that for 2023 bare trusts do not have to file, when until that morning the rules said we did need to file T3s with an April 2nd deadline, they have done exactly that. They've also directly caused the needless waste of millions of dollars with of time, energy, stress and professional fees spent for absolutely nothing.
How can we ever trust a word this government says when they have now twice changes the rules at the 11th hour (UHT and Bare trusts).
Another reason why this channel is important to Canadians. Adam, monitoring your subscriber number....thrilled to see more people showing appreciation for your work .... 96.2K! I remember when it was at 20K! Your newsletter is a game changer...that was a clever move to reach more Canadians. Keep up your team work that is working fantastically well! Meg, chiming in from PEI. :)
Thanks Meg - you were definitely an early adopter of our content and we appreciate it. Started asking for people to subscribe and we get way more now...who would have thought!? 👍
@@ParallelWealth "I tell you: ask, and you shall receive; seek, and you shall find; knock, and the door shall be opened to you. For everyone who asks, receives; and everyone who seeks, finds; and to everyone who knocks the door will be opened." Well done!💯
Adam, thanks for posting this. I knew nothing about this and actually my wife and I are involved in two Bare Trusts that we would not have known about. When we went to our accountant on Friday, she asked me how I even heard about it. They are just in the process of getting information to their clients.
CRA is no help. I contacted them twice and both times they did not really know what the new rules are and how they pertained to me having my name on my elderly Mother’s bank accounts. They assured me on both occasions that Bank accounts do not apply. I don’t think they are informed or up to speed with the new rules. The banks are no better, because I spoke to my Mom’s bank to see if I need to close her existing accounts and create new accounts without my name on them to avoid having to file T3 and they had not heard of any new rules. The accountant was the only one to give me sound advice. I talked to no less than 6 different representatives/professionals and I am still confused.
Bank accounts can fall under the bare trust, but only if account has $50k or more at any point in year. Hope that helps
They only give out the correct information 30% of the time. the auditor general is not kind on their reviews.
The CRA are up to date on the CRA's rules. This does not apply to bank accounts because they are not set up as a bare trust. This video is nonsense.
@Hastur876 So this comment goes to show that you do not understand the term "beneficial ownership". If you are a signing authority only on an account, no issue. If you are put as an owner on the account, such as for a minor (they can't legally have a bank account) or on a parent (the funds can't pass to a signatory, only an owner). Then yes, there is beneficial ownership. And yes, until CRA puts out an official bulletin saying otherwise, it is a trust. And you get the wrong person looking at the file they will hit you with penalties. Case and point, the $5,000 income from CERB. Case and point, the UHT filing on rentals owner with a spouse (legally speaking, a partnership).
Same story here.
The whole point is keeping the taxpayer confused to be able to whack him with heavy fines, no matter which option he chooses. It is DOLLAR DESPERATION.
Cra representatives, tax paragraphs, banks, lawyers, accountants, none of them are on the same page.
AI is probably the most lucid one, but the 'experts' are quick to point out not to rely on it.
I experienced these not only this time, but throughout the past year, with questions having complexity.
NEVER mind the UNETHICAL and punitive DOLLAR TAG $$$$$$ attached to these inquiries.
This is SCANDALOUS, that is, to subject a taxpayer to this kind of treatment.
It is a dog biting the hand that feeds him.
Soon we may have to file and declare that we do not have a pet, or bike, to AVOID FEES for NON REPORTING.
An 'INGENIOUS' MONEY GRAB this is.
Examine the utter LACK of ETHICS of it.
Is this PEOPLE FRIENDLY ???
Trust? What trust? Thanks to Trudeau, I'm trying to figure out how to get a third job just to buy groceries.
If you’re going to complain about Trudeau, at least complain about something he can control. Your grocery costs are controlled by For-Profit companies. Complain to them directly. Shrinkflation is real.
Fortunately I was told by my financial planner early in the year I fell into this situation. The accountant I use didn’t even want to be involved involved, but decided that they would for a few of their clients. Still haven’t received my bill yet was informed it was an expensive venture. So much for trying to do some estate planning.
Thank you very much. That was helpful.
What a headache. Thanks for this video…
ridiculous getting more e and more into peoples private lives none of their business.sickening.
Video is very useful in alerting taxpayers to the issue of Bare Trust but did not follow through on details of filing requirements. In addition it did not mention the impact of having a Power of Attorney providing authority over assets which could supersede the requirement of a Bare Trust filing. This does seem to be yet another manifestation by CRA creating much more headaches than benefits to the system as they have done with the UHT reporting.
We talk at the end what you need to do for filing. And correct, so many issues not touched on from CRA yet. Very messy rollout.
I doubt anyone has been trained properly on this yet so its going to be a messy mess
Turdeau and company are fully on board with us “owning nothing and being happy”
he didn't invent the tax program. smh
@@linebrunelle1004 I'm sure he wishes he had. I would like to invent a "send Trudeau to Venezuela program". Anybody want to help?
@13:21 It's good to know that if one is jointed on a parent's account but it's never over $50K for the year, no reporting is required.
It's only because of question No. 13 on the return. There is speculation that that specific question may be changed or removed. It all depends on if they can get the votes to amend the act.
13. Did the assets held in the trust consist only of those listed in paragraph 150(1.2)(b) with a total fair market value not exceeding $50,000 throughout the year?
In part (b) the very first item listed is cash.
Let me get this straight, from the flood of comments. We are in the midst of a recession and this new Canadian tax reporting rule for "bare trust" is creating jobs? Thanks for the video explanation.
Will have to visit there.
Firstly , let me apologize for yesterdays response, I was taken aback by the short time to get this done and the $1000.00 charge your partner mention. Since this sounds strictly like a report of what we do and NO FINACES are being exchanged, So we neither pay or get funds but because of past acceptable deeds, we now need to find and pay someone fees for what only stops us from paying fines. A quick look into the forms from the Government, they don't even tell you what needs to be covered? As a senior , I do not have a accounted on stay by and I am sure anyone with a accountant is already swamp by their current customers. So where do people like me find a Someone to help us with this before the Deadline which is now April 2 and Not April 30, Tax filing date.
Trust returns are due every year on March 31. That's why if you get investment T3 slips they don't come until April. You are 100% allowed to file this yourself. The cost for the first return is the paperwork need to set up the Trust account number (a SIN for the trust) Usually trusts have wills from the person who died, or settlement agreements from the lawyer setting up the trust.
In these situations above, there is no formal agreement a lot of times with regards to the relationship. Parents on a mortgage may have something from purchasing the house, but you wouldn't necessarily draw up a formal agreement to put your child's name on a bank account. Because there is no income involved in most of these situations, you are really filling out the check boxes on the first page of the return once you have documented what the "agreement" is. Subsequent years when you have a trust number; it really becomes about the check boxes on the first page (if that's how the return continues to look like/reporting requirements)
@@ottawa367 If the accounts I have with my mother have already issued T5 slips for this tax year, does that mean I do not have to worry about a Bare Trust or a T3 form coming? I already have to pay taxes on the T5 slips, so is that all that will be ecpected?
@@BrockoM So having a "T3 come in the mail" is a T-Slip (just like your T4) and is usually coming from holding investments like mutual funds. If you don't own those kinds of investments, you wont get a T3 from the bank.
What they are talking about above is a T3 Information Return (T3RET). In the past "regular" people would only be worried about them if someone died and you were the executor. Now if you have certain things that you are a legal owner of but the person who actually owns/uses/and receives the benefits of is different you need to file one of these returns.
You should talk to the bank and find out if you are an actual owner or just a signatory. The other thing is there is a provision specifically for things like cash, that the account has to have gone over $50,000 at some point during the year to trigger a need for the filing of the return. If you have a lot of moving parts or items, you may which to pay an accountant for an hour of their time just to talk to them about your specific situation and if it requires the return or not. If you do need to file one, you don't have to have them file it on your behalf. If you feel you can prepare an "agreement" outlining the situation, answer the questions on page 1 and put your personal info into Schedule 15 then you can and just mail it into the tax centre all on your own. There is NO requirement to pay a professional to file it for you.
I feel your pain. Its a Hot mess they dropped on us. If your having issues id reach out to an accountant NOW before the big crunch month.
For diy.... step one for me is to check out the forms the government is asking you to fill out.
Step 2. Make a list of each scenario that you think may need to be reported.
Step 3. Read the explainations from the CRA and cross out the definate exclusions as you find them and print off or screen shot and save them for later.
Step 4. Call an accountant to book a time to file. Make sure you A email them a list of your i think i need to report this stuff.
Step 5. Gather any and all documentation for each one you think you need and have it organized and ready for your appointment😊.
Good Luck! 😅
not sure where you got Apr 2nd?? it's still Apr 30th!
There are going to be a lot of people who have that vehicle situation. In the case of having my name on my mother's account, it was always in order to do her banking because banks won't work easily with a POA, especially when working online or by phone.
Thanks Adam for explaining this new filing requirement so well. I have been a subscriber for over a year and your content is immensely helpful.
Q: Would adding my single adult daughter to the title of my house where she has been residing with me for the past 10 years constitute a bare trust? My daughter wants to continue to live in my house after my death; so I want a seamless transfer of the house title to my daughter without going through the probate process. She has never been married and doesn't plan on ever getting married.
Thanks in advance.
I have heard that this applies to a fideicomiso in Mexico. Is this so? A Fideicomiso is a trust held by a bank that allows foreigners to indirectly purchase property and enjoy all the benefits of direct ownership. The fideicomiso is a workaround for expats looking to own property in Mexico's Restricted Zone, the area that holds much of the country's most prized real estate.
In the news today, March 29, 2024, the CRA pushed this back, yet again.
I am assuming spousal joint accounts/assets are exempt?
So do you have to file if you were on a parents account, but now it is an Estate issue as the parent has passed?
A CRA representative told me today that I don’t have to worry about this unless I receive a T3 in the mail. I’m worried that they are wrong. I was added to my father’s bank account when he entered a care home. I pay all his bills from this account.
If you are legally an owner on your father's account (i.e. it has your name on the account as well as your father's), then the CRA might be incorrect. However, some banks will allow you to be a signatory without being an owner.
good to know, thx
Hey Adam, can you explain me please. What is , underused housing tax return?
Hi Adam, does life insurance qualify as bare trust since it has a trustee and beneficiaries?
What is the reason bare trust reporting is required by CRA?
So if Toyota credit owns my leased vehicle, do they have to file for a bare trust?
What does “beneficially interested mean” ?
Hi Adam, I hope it's ok to ask you a question about bare trust. I'm an only child and my parents are getting up there in years. I asked my parents about their house and they said yes of course we put your name on the house. So, I assume that I now find myself in the "bare trust" realm? If so, do only my parents or both of us have to complete the bare trust portion of a tax return? Thanks for your help!
Hi Adam, if the bare trust is a corporation, this corporation will need to file both T2 and T3 under the new rule, right?
I am joint account owner with my mother who is 89 years old. My mom did this because she did not want us to go thru the hassle of probate. I am the executor and POA. My mother pays tax on all GIC's each year. Does my mom have to file this t3 ?
Ok, I am confused. I am to inherent money from an uncle who left us his pension.
This was 2 years ago in ontario. Now there was an oversight as the uncle didn't remeber naming his brother the beneficiarie.
The estate lawyer missed this and now we get none of the pension as the brother is being greedy.
Its a good thing the uncle left us another 60k from his life insurance.
I guess my question is does this effect us at all and do you know if theres anything we can do to get the full pension, as it is very significant.
why pay taxes is the government stops supplying agreed services?
What if you are common law and only one person is on the title? Is it required?
Could the average person who does their own taxes using quicktax figure out how to file a t3? I'm joint on an elderly parent's account so I think I have to file but can't afford up to $1000.00 to have a professional file. Excellent presentation. I've watched a lot on this topic and this was the best explanation by far.
Based on my personal experience with an estate trust, you probably can figure it out with some careful reading of resources on the CRA web site. The T3 guide is not particularly easy to read, but if on the first pass through you just check off "this applies, this doesn't" and so on it will become more manageable. If nothing else you will find it a sure cure for insomnia.
I’m in your situation also, you can download the T3 form and study it, I looks very complex but short.
I believe that the first step may be to register the account with the CRA and they will give you a Bare Trust account number that needs to be used. This can be done online, I believe it needs to be the account owner that does this. I'm waiting for an appointment with an accountant.
You are 100% allowed to file this yourself. The cost for the first return is the paperwork need to set up the Trust account number (a SIN for the trust) Usually trusts have wills from the person who died, or settlement agreements from the lawyer setting up the trust.
In these situations above, there is no formal agreement a lot of times with regards to the relationship. Parents on a mortgage may have something from purchasing the house, but you wouldn't necessarily draw up a formal agreement to put your child's name on a bank account. Because there is no income involved in most of these situations, you are really filling out the check boxes on the first page of the return once you have documented what the "agreement" is. Subsequent years when you have a trust number; it really becomes about the check boxes on the first page (if that's how the return continues to look like/reporting requirements) The $50,000 rule is coming from Income Tax Act (ITA) part 150. It lists the exemptions.
I have question about a T-3 I get that is an amount from a Union I have to report as Income but is actually Medical Benefits that I might use or not.
Why is the government doing this what are the benefits to them?
Hey Shane
Off topic. I’m in Ontario. I need to get USDT to my MetaMask on BSC. I use Newton. I can’t seem to figure it out. I also have a Phantom wallet. Any help is appreciated. Thx. Jon.
What a government cluster (inset word here)
Hi Adam
Thank you very much for this information I really appreciated I am senior I am planing to do my will and planing to join an account with my kids they are students but with this new rule will be not good idea could you please help me with an advice
Thank you very much
Martha
Aging population…makes sense tnat the government find ways to get their hands on their money. Truly head shaking.
what's the implications for individuals after reporting to CRA
so what is the driver for CRA to require this information going forward? Is this a BIG BROTHER action, or is there a legitimate rational that can be shared? Why would one face a penalty of not filing this, when there is NO benefit or taxes owing on any of these scenarios...another grab by CRA?
It's a fishing expedition. It's unenforceable in 99% of cases. The CRA will need to prove there is a trust arrangement. If all parties agree that there is none, there is no way to prove it. The onus is on the minister. On other words they can go beat it.
Dollar Desperation.
Scams
Outright fraud by this corrupt infiltrated penetrated gov't, cede nullis.
FINTRAC
Glad this video is out. Thanks., i am still a bit confused as to who has to file the T3 and T15. My elderly mom has my name on her accounts and investments as wel, as her condo. Do we both file or just her?
why are you asking the internet at large? smh
thank you for the informative vid as always, in the light of these new rules, what though is the best way to avoid probate without these complications of bare trust filing? Most people have tsfa's (which might list the other parent as survivor) gif's and bank accounts they want a child to inherit without these extra burdens of unclear options! would POA suffice as a kind of security measure?
I am on two of my elderly mother's bank accounts. I downloaded the T3 form and could not make heads or tails of how to fill that thing you. I would love it if you could do a video on how to fill out that form. I need someone to explain it to me like I am a 5 year old...
I'll try and get Shane back on to discuss more on how to file.
You will also need the T3APP to be given a Trust number (SIN for the trust) which is why you need to have some documentation about the arrangement
@@ParallelWealthYou should explain that a POA on a bank account is not a bare trust. A trust is only ever when you have legal title to property. Then you should delete this video for being completely misleading.
Great video! Love the look on your face on the thumbnail 😂
I try my best Rhys!
Great vid Adam - so if you hv a joint bank acct with yr children - that was opened - wen they were young- would it b betr to take your name off that account to avoid this scenario ? Thanks
Take it off - but also unlikely that accounts hits $50k or more
I called CRA on 5 separate occasions and got 4 different answers.
🤦♂️
does the t3 bare trust exemption mean total deposits or balances
If I’m joint on my mom’s bank account, do I file this or my mom or both?
Do both the trustee and beneficiary need to file a T3? I am worried that the trustee will not file and a beneficiary do not want to face penalties
What about Time Shares???
I wonder if the adult parent includes an undertaking to identify the child's beniclficial interest in the account and that it was part of a gift, would it then not be a bare trust. Would it also not make sense for the child to use the account
This is insane. How many aging adults plan for the death have added children to these things to make it what we thought to make the transition period easier on our families and now haxpve made the process harder UGH!
We completely agree! These rules, first announced in 2018, will make it costlier for those families to be proactive in estate planning.
I think the government wants to track this and then eventually once the parrnt passes away they don't want the child to have the assets. The government will either seize it or tax it
My mother put my name on one of her investment portfolios, valued above 50,000. She has control of the investment decisions and pays the taxes on the earnings. She thought that having my name on would eventually avoid probate fees. Does this arrangement fit the Bare Trust definition?
And like the tax system is easy enough to understand as it is. Another layer to cloud.
One more thing the government complicates for little return.
This government has become too nosy.
You just have to know this is about taking more money from Canadians.I don’t remember this being mentioned in the last election.
What I would like to know is what financial ramifications are involved? We are selling our property and intended to put our son on the title when we buy another retirement place. We are in our mid 70's and will likely need help very soon. Neither of us has any enthusiasm about living in an assisted living situation, so we need things set up so that our son and his wife could move in with us and help us stay in our home.
Im a young Canadian who has no idea whats going on
Somebody appears to be squeezing money out of people to have these t3s made up or filed ridiculous especially if your parent is in a nursing home and being an executor one must pay their bills for them like heat, hydro , land taxes... I don't have an accountant myself and just use an income tax service, being low income myself where do I get these t3s?
Thanks.
Even if you get financial advice, if CRA audits and doesn’t like what you did, CRA doesn’t care and will penalize you. It’s a no win situation with CRA’s vague parameters.
That is exactly why they keep it vague: more penalty possibilities.
This is a relatively new development.
Some decades ago, CRA used to be a semi-friendly item.
100% agree, that's why they don't give clear answers when you call them (the CRA)
Question: if a lawyer has an interest bearing trust account for his client , that has an account in the bank and interest come from that, will that be regarded as bare trust??
Also because no other trust code fits for this scenario. Called CRA 7 times but they didn’t have an answer
My understanding is the law society regulates their lawyers and has annual reporting requirements to them with regards to client trust accounts. Banks are not allowed to make bank charges or interest on any trust account holding funds of multiple people. These accounts are specifically exempted in section 150 ITA.
Singular trust accounts bearing interest is the client's interest. There would be a t-slip issued by the bank if it's over $50 and that income would be included in the beneficial owners return. If the bank issues it directly to the client no income to include on the T3, its just an information return. If it is issued to the law firm, in addition to the information: you need to include it as income on the T3 return and then issue a T3 slip to the client (an in and an out). Even if the account is dormant and has no income you do need to file an informational return.
The major issue from my understanding regarding these accounts is the extensive disclosure of personal information of those involved and if privilege applies. There could be instances where the client does not agree to have their personal information being disclosed on these returns and then there is no way to complete that part of the return. Will CRA penalize the law firm for non-disclosure? Hope this helps!
Is there any benefit with bare trust...doesn't sound like there is
tldr
- A bear trust is an arrangement where one person (the trustee) controls an asset on behalf of another person (the beneficiary).
- Common examples of informal bear trusts include adding family members to property titles, bank accounts, or mortgages.
- New reporting rules in Canada will require bear trusts to file a trust return starting in 2023.
- Failure to file the trust return can result in penalties up to $2,500 per late return or 5% of trust assets for gross negligence.
- Common personal scenarios that create bear trusts include helping elderly parents with estate planning or finances.
- Common business scenarios are real estate partnerships/joint ventures and corporate reorganizations.
- Preparing the trust return can cost over $1,000 due to documentation requirements.
- Exceptions may apply for spousal property like the family home and bank accounts under $50,000 balance.
- People unsure if rules apply should consult an accountant to review their specific situation.
- The trust return filing deadline is 90 days after the calendar year end.
I think it's "bare" trust (not "bear" trust)?
But if it’s a joint account with a child even an adult child that has full access to the account and what’s in it that doesn’t actually qualify as a bare trust. According to the Cra ?!
To what end does the government need this for.
The accounts probably lobbied the government for it. 1000 dollars gone to the accounts with a stroke of a pen.
I just contacted my MP to raise this exact question... hopefully in the HOC.
They are only looking for information this year, they will use that information to structure a tax system to force millennial and others who are to inherit a massive amount of wealth in the next 5 years, to pay the tax on that transfer rather than get away with seeking shelter from the tax man. something like 100x the gap of canada will be transfered from parent to child in the form of land, savings, investments in the next 5-10, the government believes it deserves a piece of this pie for doing nothing. These champagne socialists have no regard for anyone who works for a living and the wealth they have accumulated as a result
They were looking to find hidden assets or income. But these returns don't tell them anything about what the trust assets actually are, only that it's more then $50,000
I am joint on my dad’s account. But he has no money so it shouldn’t have any effect on me.
400 buck plus tax for account to do t3 …. Person on joint account with elderly parent to assist them ……now a bare trust wowza. That quote is from a accountant in Ottawa, Ontario.
That would be cheap by what I am seeing and hearing.
@@ParallelWealth from looking at form all thats needed is create a trust number which can be done on line. Then enter ur sin and fathers. Then contact info. Attach something from bank showing ur joint and start date. Everything else on form is blank as uve made no money from account. And father has paid the tax on the interest made. I just dont want to screw it up. I do feel bad for people helping their elderly parents and maybe tight on money now having to pay an accountant for simple work……someone should put out a how to fill out form video in this situation, as form looks complicated as it covers so many types of bare trusts. Also moving forward I am sure people aren’t going to want to be joint on account with elderly parent, which is a shame as a-lot of times they need a-lot of help with paying bills etc.
@@ldd9672 Not simple work at all. Determining the filing requirements is far from simple. The liability to the accountant if they provide wrong advice means that this needs to built into the fees. Getting a trust number is not going to be straightforward as CRA will want a trust deed of some sort, so this needs to be created. Then the trustee will need to get online access, then provide it to the accountant. This is before we even get to the filing stage. Then the follow-up etc. People will expect the accountant to do it correctly, so that takes many hours of unpaid work to learn all the in and outs. It is not the cost of filing a simple form. I'm with PW, $400 is cheap.
Is being the power of attorney on a parents bank account the same as being added to the bank account ?
I don't think so. One gives you access to the account as you are on it..the other only if your parent is not able to deal with their bank accounts
@@garth217 True: power of attorney gives the holder the legal right to act on behalf of another person for whatever reason.
Also, joint account holders do not automatically have full access to the funds in a bank account: my siblings have been joint on my chequing and savings accounts for years, but I'm the only one who has sole signing authority since it's my money. They're on those accounts simply to give them (my executors) access to the funds once I die without waiting for probate. Is this a "bare trust"? I don't think so, but it looks like I might have to cough up a few hundred to an accountant to find out for certain.
@@agconsNo it's not a bare trust, and no you don't have to go to an accountant, the bank manager will be able to tell you. The new legislation has nothing to do with joint bank accounts: it only exists to help track money laundering and tax avoidance committed by foreign multimillionaires who own Canadian property through their children.
@@Hastur876 Thanks for your reply. I did a whole lot of checking after posting, and I did find out that if the balances of any of the joint accounts >=50K at any time then there *probably* is an obligation to report. Keeping those accounts under that amount is not going to be a problem for me. 😅
My account manager at the bank won't be back at work until Tuesday so I'll find out for sure from him.
@@agcons No there is no obligation to report unless the joint account was set up as a bare trust. This video is nonsense.
Ok but what’s the point of this? I’m a co-signer for a brothers mortgage, do I have to file a bare trust? I’m making him pay for it if I do. But then if I’m removed. Do I have to file again stating I’m no longer in that bare trust?
Quite possibly yes. If you are on title, you would need to file.
@@ParallelWealth My daughter's boyfriend's parent's have co-signed on their mortgage and are now named on their title. Which of them files the bare trust? Would it be both his parents each individually, would it be my daughter and again her boyfriend????? Their was also talk of removing their names from the mortgage and from the title of the house, would something need to be done regarding the bare trust after that?????
Thank you for the video. Very informative. I have a question though. In the CRA website it states this applies for ‘tax years ending after Dec. 30 2023’ so wouldn’t that mean this doesn’t apply until the 2024 tax year? So we have a year to figure this out? Or am I misunderstanding?
Most trusts have a December 31st year-end (except for some very minor exceptions). All these trusts have their first filing obligation for the 2023 year, which the return is due 90 days after the end of the calendar year (April 2, 2024 for this year).
@@ShaneSchepens thank you
for a joint account with my parent, I just actually do it. I let my parents gift 1% to me, so from 2023 I will report 1% for interest and dividends, capital gains for those accounts from 2023, So actually I own part of the joint accounts, In this case, I do not need to report anything?
What is the point of this added unnecessary hassle?
Is a shared bank account a bare trust
Are executor fees a bare trust
Doesn't affect me. I'm not filing this year. Or next year until there's a new regime in charge
"New regime in charge"? If you're talking about political party, I doubt the CRA will care if you use that excuse not to file!
Leave it to our pinhead government and the CRA to create a "make work" project for every taxpayer who fall under the rule of a bare trust.
Sure, because previous pinhead governments and future pinhead governments did or will do so much better. Not every single thing is politically motivated.
what is the intended reasoning for this new rule?
I think that's the real question. They haven't truly said to this point.
In the end, they are probably coming after generational wealth for the average person, not the RE corp. Just a guess.
To those who are calling CRA to inquire, keep in mind that those temporary parttime agents are not there to provide you accounting advices or explain what bare trust is. You should be following up with your accountant to discuss your scenarios. Usually, if your file get selected for audited/review, you will be talking to a different person who would have training in these areas and have far better understanding than what a CRA telephone agents would have.
What happens if you just take your name off of your parents account, do you still have to file?
You would for last year, possibly this year and not next.
So I am the first to respond and $1000.00 to report something that is due in a few weeks from something NO ONE knew about or will know about ? unless you are always watching these types of video's or have a accountant on stand by? Has this just become a way to send us all running back to H& R block? Will Turbo Tax, Intuit automatically know what to do? Then there are the different ways individuals have made their easier for them selves to live. For Example my ex wife separated 10 plus years ago still has her name on my property and I still have my name on her property. We have not lived together for over 10 years, I file as separated single, I have no idea how she files? Also we have 2 adult children who we have Insurance policies' and bank accounts in all the names ? How the F&*&& k are we to figure all this out before April 30. And Since we have past the Dec 31,2023 date we cannot even make changes to these titles , policies, accounts to make them null and void.
It's actual due March 30/April 2 (because of easter) :/
Thanks for this information, and explained as well as it could be.
One thing I did not hear however, is why the government is bringing this in. (I do admit my financial knowledge is quite average.)
They want your dollars for missing to report that something does not apply to you.
A new and 'clever' money grab.
You could read up the CRA guidance or good articles e.g. by Ernst & Young, where you'll find out it is to collect information on relationships between people that can be used to root out tax fraud and money laundering.
I like the idea of the CRA automatically filing my income tax every year. I do not have a very complicated income or investment, so please let me know if this is in the works. I've heard in countries like Sweden or Switzerland had done this for years now. ✌😀
You absolutely don't want to do that.
Nope. Nope. And NOPE! CRA is not going to optimize your filing in your best interest. They will get the numbers on the form correctly (probably), but that's it. I guarantee that, even the simplest tax situation, will end up further behind financially over a 10 year period allowing CRA to do this.
I don’t understand how a simple joint bank account is labelled as a “ bare trust” This doesn’t seem correct
Come on guys. My wife and I have had joint chequing and savings accounts for all 37 years. The balances are nowhere near $50,000. We don't own any property and both of us have complete full access to deposit, withdraw funds from these accounts. Surley our situation does not apply
Correct
Will there be any tax to pay with this filing?
There should not be any taxes payable. That is because for all other purposes of the ITA, the beneficial owner reports any income and would pay tax in their personal/corporate tax return - just like before.
The govt wouldn’t ask us to file this form unless it was beneficial to the government down the line. There must be some tax to pay down the line.😊
Suggestion: Every one caught by this because they have a joint account with their elderly relative should file a paper return rather than electronic. Create a massive workload for CRA staff and maybe they will rethink this!
Seems like another way for CRA (the government) to ensure they get into every ones finances, regardless of the cost to the public. Who actually benefits from this law?
Can you gift your child your home without them paying taxes on it ?
I'm power of attorney for my mom's TFSA and it's over $50k. Would I need to file bare trust for 2023?
NO, because TFSA only can have one owner
So in the case of a bank account of an elderly parent do both the child and the parent have to report the bare trust?
No. Unless the bank account is a bare trust, which was set up by a lawyer with an appointed settlor and trustee. I'm betting your bank account is not that.
. I just transferred the money to my account problem solved