CRA pausing new 'bare trust' reporting requirement just days before filing deadline

The Canada Revenue Agency (CRA) is hitting pause on a new "bare trust" reporting requirement with just a few days remaining before the deadline.

But on Thursday — with four days before the deadline to file — the CRA announced that it would be pausing the reporting measures.

"In recognition that the new reporting requirements for bare trusts have had an unintended impact on Canadians, the Canada Revenue Agency will not require bare trusts to file a T3 … for the 2023 tax year, unless the CRA makes a direct request for these filings," a statement released by the tax agency said.

John Oakey, a vice president with the Chartered Professional Accountants of Canada, said the government hasn't done a great job of communicating the changes.

"If I put my name on [my parents'] bank account in order to help them pay their bills, that creates a trust relationship," he said.

In those cases, the bare trust does not earn any money for the trustee to report in a given tax year.