From what I can tell, the draft legislation to enhance the list of excluded owners for the 2023 UHT hasn’t received Royal Assent yet. It appears that the CRA has been following the draft guidelines in the 2023 UHT form.
With only 12 days before the April 30th deadline, it doesn’t appear that Royal Assent will be granted by this deadline. This might imply that it would be wise to file the UHT returns using the 2022 forms just to be safe to avoid the risk of penalty if this draft legislation is thrown out and CRA has to revert back to the old rules.
I have two clients that are exempt under the draft legislation but were required to file under the 2022 rules. If by April 29th we don’t have Royal Assent, I’m inclined to use the 2022 form and file their 2023 UHT Returns.
CRA remains silent on how to proceed in this case and has left it in the hands of tax professionals to determine if they are willing to accept the risk of following proposed legislation and possibly being subjected to the late filing penalties or choosing to adhere to current rules and potentially finding out later that the work was unnecessary.
I believe CRA released the updated form in anticipation of the proposed legislation being passed prior to the deadline. As we all know, that did not happen and, as you point out, the most recent version of the form has instructions which are aligned with proposed draft legislation and not the current enacted legislation.
From a processing point of view, my understanding is that CRA will accept both the new and prior version of the UHT-2900. Then I saw this on LinkedIn this morning.
Hopefully CRA will be able to post an official position so there is more clarity around whether or not the taxpayer (and you) need to go to the extra effort of filing a return that may no longer be required if/when the draft legislation is passed.
Appreciate your reply, @Sarka. This is helpful knowing that CRA is CANCELLING 2023 UHT Returns that have been filed under the proposed exclusion rules. It sure would be nice if CRA would communicate this information to tax professionals so we don’t have to waste our time and uselessly charge our clients for work that will simply be shredded by CRA. Wow.