What should a British Columbia corporation do in the final eight weeks of 2023 to avoid leaving money on the table — and avoid stepping on new traps? Year-end planning is always part discipline and part timing, but this year carries three items that make it unusually consequential: a brand-new trust reporting regime that catches arrangements owners never thought of as "trusts," a CEBA forgiveness deadline weeks away that decides up to $20,000 of free capital, and a high interest rate environment that changes the math on capital spending. Handle these alongside the standard moves and you close the year in control rather than reacting in the spring.
This post walks through the year-end agenda for an established BC corporation, with the 2023-specific items front and centre.
New trust reporting: the trap most owners do not see coming
For taxation years ending on or after December 31, 2023, enhanced trust reporting rules apply. The change matters to business owners because it sweeps in arrangements that were never previously required to file a T3 return — including bare trusts.
A bare trust exists whenever legal title to an asset is held by one party for the benefit of another. BC owners stumble into these constantly:
- A property held in one shareholder's name "on behalf of" the corporation.
- A parent on title to help an adult child, or a child on a parent's account.
- A nominee corporation holding real estate for the beneficial owners.
- An "in trust for" investment or bank account.
Under the new regime, affected trusts must file a T3 return with Schedule 15, disclosing detailed information on trustees, beneficiaries, settlors, and anyone able to control the trust — names, addresses, dates of birth, jurisdictions of tax residence, and tax identification numbers. For December 31, 2023 year-ends, the filing is due March 30, 2024, and the penalties for non-filing are steep.
Action before year-end: inventory every arrangement where someone holds an asset for someone else. Do not assume a casual family arrangement is exempt. Identify now who must file and start gathering the stakeholder information, because assembling dates of birth and tax numbers in March is a scramble you do not want.
CEBA: the forgiveness deadline lands inside your planning window
If your corporation holds a CEBA loan, the January 18, 2024 forgiveness deadline falls squarely in your year-end horizon. Repaying $40,000 on a $60,000 loan (or $30,000 on a $40,000 loan) by that date captures up to $20,000 of forgiveness; applying to refinance through your issuing bank by the same date extends the repayment deadline to March 28, 2024. Miss both and the full balance converts to a 5% term loan due December 31, 2026.
Two year-end considerations:
- The forgivable amount is taxable income. Coordinate the inclusion so it is reported correctly and factored into your 2023 tax estimate.
- Cash timing. The repayment outflow lands in January, alongside GST/PST and payroll. Build it into your forecast now so the year-end and the CEBA repayment are planned together, not colliding.
Capital cost timing in a high-rate year
The Bank of Canada's policy rate held at 5.00% through the autumn of 2023, and that changes the capital-spending calculus. Two levers matter at year-end:
- Timing of capital purchases. Assets must be available for use before year-end to claim capital cost allowance (CCA) this year. If you were planning equipment purchases anyway and you have the taxable income to shelter, acquiring before December 31 pulls the deduction forward. But do not buy assets you do not need purely for a deduction — at 5% borrowing costs, financing an unnecessary purchase to save tax is a losing trade.
- The half-year rule and accelerated measures. Coordinate with your accountant on which assets qualify for accelerated first-year deductions, which materially change the timing benefit.
The discipline this year: let genuine operating need drive capital spending, and use year-end timing only to optimize the deduction on purchases you would make regardless.
Salary versus dividends: the annual owner-pay decision
Year-end is when BC owner-managers finalize their remuneration mix. The trade-offs:
- Salary is deductible to the corporation, creates RRSP room, and generates CPP pensionable earnings (a cost, but also a future benefit).
- Dividends carry no CPP cost and can be simpler, but are paid from after-tax corporate income and create no RRSP room.
- Bonus accruals declared before year-end and paid within 179 days can shift the deduction into 2023 while deferring the personal inclusion into 2024.
The right mix depends on your personal cash needs, your RRSP strategy, and your corporation's income level relative to the small-business limit. This is a calculation to run with your accountant before December 31, not a default to repeat from last year.
Worked example: pulling the year-end levers together
Consider Selkirk Millwork Ltd., a BC corporation with a December 31 year-end, expecting roughly $320,000 of pre-tax active income for 2023 and holding a $60,000 CEBA loan.
Scenario A — No year-end planning. Selkirk files as-is. It pays BC small-business corporate tax of roughly 11% on the $320,000 — about $35,200. It lets the CEBA deadline slip, losing $20,000 forgiveness and converting the loan to a 5% term loan. It overlooks a bare trust holding a leased property, missing the new filing.
Scenario B — Coordinated year-end plan. Selkirk:
- Accrues a $40,000 bonus to the owner before year-end (paid within 179 days), reducing 2023 corporate income to $280,000 and cutting corporate tax by roughly $4,400.
- Repays $40,000 on the CEBA loan by January 18, capturing $20,000 forgiveness (recognizing it as income, ~$2,200 tax) — a net gain of about $17,800.
- Identifies the bare trust and files the T3/Schedule 15 on time, avoiding non-filing penalties that can run into the thousands.
The coordinated plan moves the needle by well over $20,000 in captured value and avoided penalties — for a company that did nothing unusual, only nothing un-planned.
Do not overlook instalments and the looming filing calendar
Year-end planning is not only about deductions; it is also about avoiding the quiet cost of arrears interest. Two housekeeping items deserve attention before December 31:
- Corporate tax instalments. If your corporation pays instalments, confirm they are current and that the year's payments reasonably track your actual income. A profitable 2023 can leave you under-installed, and the CRA charges interest on the shortfall. A quick reconciliation now is cheaper than the interest later.
- The first-quarter filing crunch. A December 31 year-end means several deadlines cluster in the new year: the T3/Schedule 15 for affected trusts (March 30, 2024), T4 and T5 slips by the end of February, the CEBA repayment by January 18, and GST/PST remittances throughout. Mapping these onto one calendar now prevents the spring scramble — and prevents a missed slip deadline that triggers penalties entirely separate from your tax bill.
The owners who close the year calmly are not the ones who did less; they are the ones who saw the whole first-quarter calendar in November and staged the work.
A year-end checklist for BC corporations
- Trusts: inventory bare and family trusts; identify T3/Schedule 15 filers; gather stakeholder data.
- CEBA: decide repay-versus-refinance; book the January cash outflow; plan the income inclusion.
- Capital spending: confirm assets are available-for-use before year-end where CCA timing helps and the purchase is genuinely needed.
- Owner pay: finalize the salary/dividend/bonus mix for the year.
- Income timing: consider deferring revenue or accelerating deductible expenses where it fits your cash position.
- Instalments: confirm corporate tax instalments are current to avoid arrears interest.
- Charitable and other deductions: complete any planned 2023 deductible outlays before December 31.
Key takeaways
- New trust reporting for 2023 year-ends catches bare trusts owners never thought of as trusts; the T3/Schedule 15 is due March 30, 2024 with steep non-filing penalties.
- The CEBA forgiveness deadline (January 18, 2024) sits inside your year-end window — plan the repayment and the taxable inclusion together.
- In a 5% rate environment, let real operating need drive capital purchases; use year-end timing only to optimize the deduction.
- Finalize the salary/dividend/bonus mix deliberately rather than repeating last year's default.
- A coordinated plan routinely captures $20,000+ in value versus filing as-is.
Year-end is not about doing more — it is about timing the moves you were going to make anyway.
If you want a coordinated year-end plan that folds trust reporting, CEBA, and remuneration into one decision, RN Canada's advisory team provides fractional CFO and tax-planning support to BC corporations before the December 31 line.