A set of new income tax rules for filing T3s on trust income may have an impact on lawyers holding specific trust accounts.
Lawyers are now required to file annual T3 Trust Income Tax and Information Returns for trusts unless specific conditions are met, according to recent changes to Canada’s Income Tax Act. These changes are effective for all tax years ending after December 30, 2023.
While lawyers’ general pooled trust accounts are exempt from the new requirements, other trust accounts—such as specific client trust accounts—will be required to file annual tax returns.
Additional Resources Available
The Canadian Bar Association published a comprehensive article summarizing key points.
National Magazine published an analysis, Know thy new trust account disclosures.