Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Can the exceptions provided for in subsection 150(1.2) of the Act apply to exempt non-express trusts from the reporting requirements of subsection 204.2(1) of the Income Tax Regulations?
Position: Yes.
Reasons: The exceptions to subsection 204.2(1) of the Income Tax Regulations may apply to any trust which has a filing obligation pursuant to paragraph 150(1)(c) of the Act regardless of whether that trust is resident in Canada and an express trust or, for civil law purposes, a trust other than a trust that is established by law or judgement.
2025 CTF Annual Tax Conference
CRA Roundtable
Question 12: Interaction of Subsection 150(1.2) of the Income Tax Act and Subsection 204.2(1) of the Income Tax Regulations
Paragraph 150(1)(c) of the Income Tax Act (the “Act”)(footnote 1) requires a trust to file a return of income in prescribed form and that contains prescribed information for each taxation year of the trust, unless one of the exceptions provided for in paragraph 150(1.1)(b) applies to the trust. However, where a trust is resident in Canada and an express trust, or, for civil law purposes, a trust other than a trust that is established by law or by judgement, subsection 150(1.2) denies the application of the exceptions in subsection 150(1.1), unless the trust meets one of the exceptions listed in subsection 150(1.2).
The exceptions provided for in subsection 150(1.2) also serve another purpose: where applicable, they also exempt a trust from the additional information reporting requirements imposed by subsection 204.2(1) of the Income Tax Regulations (the “Regulations”).
It is unclear however if the preamble of subsection 150(1.2) limits the availability of the exceptions therein to trusts that are resident in Canada and express trusts or, for civil law purposes, trusts other than those established by law or by judgement. This creates uncertainty as to whether these exceptions can apply to exempt non-express trusts from the additional information reporting requirements pursuant to subsection 204.2(1) of the Regulations. Could the CRA please clarify?
CRA Response
Pursuant to proposed subsection 204.2(1) of the Regulations, where a trust has a filing requirement under paragraph 150(1)(c), the trust shall provide the information required therein unless that trust is a trust described in any of proposed paragraphs 150(1.2)(a) to (r).(footnote 2)
In our view, the exceptions to proposed subsection 204.2(1) of the Regulations, provided for in proposed paragraphs 150(1.2)(a) to (r), are not restricted to trusts described in the preamble to subsection 150(1.2). The exceptions to proposed subsection 204.2(1) of the Regulations can apply to any trust which has a filing obligation pursuant to paragraph 150(1)(c) regardless of whether that trust is resident in Canada and an express trust or, for civil law purposes, a trust other than a trust that is established by law or by judgement.
Accordingly, if a particular trust is not an express trust resident in Canada and has a filing obligation pursuant to paragraph 150(1)(c), where that trust is listed in any of proposed paragraphs 150(1.2)(a) to (r), the trust will not be subject to the additional information reporting requirements of proposed subsection 204.2(1) of the Regulations. In other words, a trust that is not an express trust resident in Canada that is required to file a T3 Income Tax and Information Return pursuant to paragraph 150(1)(c), will not be required to file Schedule 15 if it is a trust described in any of proposed paragraphs 150(1.2)(a) to (r).
This view is consistent with our comments in CRA document 2023-0994231C6.
Dawn Dannehl
2025-108080
December 2, 2025
FOOTNOTES
Note to reader: Because of our system requirements, the footnotes contained in the original document are shown below instead:
1. The Act means the Income Tax Act R.S.C. 1985 (5th Supp.) c.1 as amended from time to time and consolidated to the date of this response and, unless otherwise expressly stated, every statutory reference herein is a reference to the relevant provision of the Act.
2. On November 17, 2025, the Minister of Finance and National Revenue tabled a Notice of Ways and Means Motion to introduce a bill entitled An Act to implement certain provisions of the budget tabled in Parliament on November 4, 2025 (“Bill C-15”). The content and references made herein reflect proposed amendments to the Act in Bill C-15, which are applicable to taxation years that end after December 30, 2025, or earlier taxation years, as the case may be.
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