The enhanced trust reporting rules (Bill C-32) was given royal assent in Parliament and came into force on December 15, 2022. The rules are effective for the 2023 calendar year and subsequent years.

The purpose of these enhanced reporting rules is to improve the collection of relevant information to help the Canada Revenue Agency (“CRA”) assess the tax liabilities for trusts and their beneficiaries.

The enhanced trust reporting rules capture trust relationships that did not previously need to be reported.  Your purchase and sale agreement says your deposit will be held in trust by Mosaic Avenue Realty Ltd., a solicitor, or notary. This requirement to hold your deposit in a trust account creates the trust relationship that is captured by the enhanced trust reporting rules.

Any time new legislation comes into effect, it takes time to understand the rules and assess how to appropriately comply with them.  Mosaic is required to file the necessary information with the CRA by March 31, 2024.

The new rules only result in additional disclosures about who the beneficiaries of each trust account are.  Beneficiaries include anyone who benefits from the creation of the trust. For example, when you signed your purchase and sale agreement and provided a deposit to Mosaic, you and the developer became a beneficiary of the trust.  

In circumstances where Mosaic held the deposits in Trust, your information will be reported to the CRA on the required T3 Information Return.  In circumstances where a solicitor firm held the deposit in Trust, your information will be provided to the solicitor firm so that they can file a T3 information return.  Purchaser information will not be shared with any other parties.

Your information will be collected via a secure form. Mosaic will retain your information until our reporting obligation to the CRA ceases.

Even if a home was assigned during the 2023 year, if the deposit was held in trust for longer than 3 months Mosaic is required to  report additional information to the CRA.