Hi Preston,
I concur with Hugh's perspective. In my experience, I have not prepared two separate returns for a trust's 21st anniversary. The provisions under subsections 104(4) and 104(5) of the Act do not reference a deemed year end in this context. From a compliance standpoint, my usual approach has been to file a single return as usual and complete the relevant sections of Form T1055 pertaining to the deemed disposition and updating the deemed disposition date on the jacket of the return.
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Ergi Thodhori, CPA
Doane Grant Thornton LLP.
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Original Message:
Sent: 11-09-2025 11:17
From: Hugh Neilson
Subject: Clarification on Filing T3 Returns in the Year of a Trust's 21st Anniversary
There is no deemed year-end, only a deemed disposition and reacquisition of trust assets on the 21st anniversary.
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Hugh Neilson
Kingston Ross Pasnak LLP
Original Message:
Sent: 11-07-2025 15:47
From: Preston Gallant
Subject: Clarification on Filing T3 Returns in the Year of a Trust's 21st Anniversary
Good day,
I am seeking clarification on the CRA's practice or expectation for filing T3 returns in the year a trust reaches its 21st anniversary. In this case, the trust will continue beyond the anniversary date.
From professional courses and various readings, the general understanding is that two T3 returns should be filed - one for the short taxation year ending on the anniversary date, and a second for the remainder of the year ending December 31. However, I have not been able to locate a definitive CRA reference confirming this approach.
I tend to favour the two-return method, as it provides a clear break between the two 21-year periods.
Thank you in advance for your guidance.
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Preston Gallant, CPA
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