Canada’s income tax landscape is constantly evolving, with new riles and adjustments emerging each year. As compliance and reporting obligations become more complex, staying informed about the latest changes is essential. To support you, we’ve highlighted some of the key 2025 updates to help you navigate these developments with clarity and confidence.
MyTrust Account and Canada Revenue Agency (CRA) Online Authorization Access
CRA recently launched MyTrust Account, which provides access to a secure online portal for legal and authorized representatives of trusts. Currently not all correspondence is available on MyTrust Account and CRA may still send documentation via mail.
We have prepared a detailed set of instructions on how you can obtain access to this secure online portal for your trust and provide HW Partners access as an authorized representative of your trust. We are requesting that all trust clients provide us with access to CRA. The instructions can be found on our website https://hwpartners.ca/financial-tools-checklists/
Changes to the Alternative Minimum Tax (AMT)
AMT is not a new concept in the Canadian income tax system; however, many taxpayers are not aware of AMT as it does not generally impact them. AMT is a notional calculation of tax payable under an alternative set of rules governing the computation of income and deductions. If tax calculated according to these alternative rules is greater than tax calculated under the normal rules, then a taxpayer must add the difference to their tax payable for the year, increasing taxes owing. Effectively, tax paid for the year is the greater of tax calculated under the normal rules and tax calculated under the AMT rules. The rules for AMT can apply to trusts, particularly those which claim an interest expense deduction. Where AMT applies, trusts could have an income tax balance owing.
Expanded Trust Reporting
Expanded trust reporting became law effective for the 2023 taxation year, but bare trusts were previously exempted from filing trust income tax returns for the 2023 & 2024 taxation years. Based on the Federal Budget released November 4, 2025, and CRA commentary in December 2025, bare trusts’ income tax return filings will be deferred for another year, such that they will not be required to file for the 2025 tax year. It is expected that this filing requirement will commence in the 2026 tax year, subject to potential new exemptions.
Included below are some examples of arrangements that could be considered a bare trust:
- A parent who adds an adult child on legal title of a property. In these circumstances, there may be no change in beneficial ownership from the parent to the child if the child is holding the property in favour of the parent and there was no intention to gift. There are certain filing exemptions for personal-use properties.
- Shares of private corporations held “in trust” by a parent or other individual. These arrangements are common where minor children are shareholders in private corporations, particularly professional corporations where only individuals are permitted as shareholders.
- Bank or investment accounts held “in trust” by a parent or other individual. These accounts may have been created to hold the funds of a minor child. There are certain filing exemptions for accounts under certain thresholds.
- Other bare trustee arrangements where the legal title owner of property does not also hold beneficial ownership.
Even if there was no activity in the trust for the year, if the trust income tax return is not filed by the deadline, a penalty of up to $2,500 or 5% of the trust assets per year can apply. For more information about these trust reporting rules, please see this post on our website. New trust filing exemptions are subject to change as they have not yet been passed into law.