A few months ago, did Canadians need to submit Naked Trust 2 deadline to file a tax return, we now know how many people actually filed a return—even though Canada Revenue Agency Press the Pause button.
According to National Revenue Minister Marie-Blaude Bibeau, 44,034 tax returns were filed between January 1 and April 16 this year.
John Okey, vice-president of tax at the Chartered Professional Accountants of Canada, said he was not surprised by the figure.
“It’s anticipated that a certain number of trusts will be filed because you’re preparing ahead of time to get these things done before the deadline,” he told Global News.
However, he warned that there are some issues as Bibeau noted that the numbers could change and there could be other naked trusts out there either from people who are filing or from people who are not aware they have a trust that needs to be filed.
The Canada Revenue Agency introduced a new requirement this year to file a bare trust arrangement return.
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This type of trust is when the legal title to a property or account does not correspond to the actual owner.
This can include a parent co-signing and owning a child’s mortgage or ownership of a joint bank account between an adult child and an older parent.
Regardless of the confusion, some taxpayer advocates are calling on the Canada Revenue Agency and the government to take action.
“The Canada Revenue Agency should apologize to every single one of those 44,000 Canadians,” Franco Terrazzano, federal director of the Canadian Taxpayers Federation, told Global News. “This is causing emotional stress and financial stress for Canadians.”
Accountants are also in a bind, with Chris Dyck, partner at Avisar Chartered Professional Accountants, telling Global News it's more than just a matter of pressing send.
“We spent quite a bit of time in February and March, when it was obviously busy — it’s our busiest time of the year — and that was really key because the government rolled it out and we did all the preparations and then they changed the rules,” Dyke said.
A Bibeau spokesperson told Global News the pause, which began in late March, will last for a year “to give Canadians time to properly understand the rules,” but noted that taxpayers who have already filed returns will still be accepted and processed.
Accountants: Naked trust rules need to change
Okey and Dyke said now is the time for the Canada Revenue Agency and the federal government to consult with taxpayers, advisors and other stakeholders to ensure changes are made to make it easier for Canadians to know what to do.
Mr Dyke suggested the government consider amending legislation so that certain circumstances do not need to be reported, such as when an adult child's name appears on their parents' property deeds.
“I think the first option is to actually get the rules in place so that they’re really targeting who they’re really going after, that would be very beneficial,” Dyke said.
Oki said work could begin here to better communicate the revised rules.
“That way, the public and advisors can understand what the government is looking for and what the fiduciary reporting rules cover,” Okey said.
— Naomi Barghiel of Global News
© 2024 Global News, a division of Corus Entertainment Inc.
