Opinion: Canadians will ignore the new trust reporting rules. So will the Canada Revenue Agency

financialpost.com:

By Allan Lanthier

The federal government’s new trust reporting rules are so outlandish that hundreds of thousands of Canadians will never comply with them. The Canada Revenue Agency is also likely to ignore the rules in many situations. It has already made two announcements to that effect. Think about that. The CRA will simply disregard a law enacted by the Parliament of Canada because the rules are so flawed.

The rules require annual reporting whenever one person has legal or registered title to an asset for the benefit of the “true owner”— an arrangement known as a “bare trust.” The idea is to target money-laundering, terrorist financing, tax evasion and other financial crimes: instead, the rules hit innocent Canadians. Never in the history of Canadian tax has a target been missed so badly.

Here’s one example: Your 16-year-old daughter wants to buy a cellphone: she is a student and works part-time. You sign the contract on her behalf. Guess what? You are now the trustee of a bare trust that owns the cellphone. So you must file a 2023 trust return no later than April 2 and disclose the arrangement. If you don’t, you have contravened the law and are subject to penalties.

But surely there are exceptions, you must be thinking. And yes, there is an exception if an arrangement involves assets with a value of no more than $50,000. But the exemption only applies if the trust assets are money, listed securities or government debt: if there is even one penny of other assets, such as cellphones or other family items, filing is required.

The legislative overreach extends far beyond cellphones. People caught by the new rules include: parents who add their names to the legal title of their child’s home to help get a mortgage; a