Reporting for certain bare trusts begins with the 2026 tax year. Here is who is affected, who may be excluded, and what to do before December 31.

On October 5, 2026, the Canada Revenue Agency (CRA) updated its guidance on bare trust reporting and refreshed its “Enhanced reporting rules for trusts and bare trusts” FAQ. If you have never heard the term “bare trust,” you are not alone. But you may have an arrangement that could fall within these rules without realizing it. Canada

A Quick Recap: How We Got Here

The enhanced trust reporting rules first applied to tax years ending on or after December 31, 2023. Under these rules, many trusts that previously did not have to file became subject to annual T3 reporting and, where required, Schedule 15 (Beneficial Ownership Information of a Trust).

Bare trusts were initially caught by the expanded reporting rules, but the rules were subsequently amended:

• 2023: The CRA said it did not expect bare trusts to file a T3 return or Schedule 15 unless the CRA made a direct request.
• 2024 and 2025: Bare trusts are not subject to the trust reporting rules and are not required to file a T3 return, including Schedule 15, for these taxation years.
• 2026 onward: Certain reportable bare trusts may be required to file a T3 return and Schedule 15 for taxation years ending on or after December 31, 2026. Canada

For a trust with a December 31 year-end, the T3 return is generally due 90 days after the end of the taxation year. That means the first filing deadline for a reportable bare trust with a December 31, 2026 year-end would be March 31, 2027. Canada

What Is a Bare Trust?

A reportable bare trust can exist when one or more people (the “legal owners”) hold legal ownership of property for the use or benefit of someone else (the beneficiaries), and the legal owner can reasonably be considered to act as the beneficiaries’ agent.

In a bare trust arrangement, the beneficial owner generally retains the use or benefit of the property while another person holds legal title.

Common examples can include:

• A nominee corporation holding title to real estate
• A parent on title to property to assist a child
• An adult child added to a parent’s bank account for convenience
• An “in trust for” account opened for a minor

However, not every arrangement that looks like one of these examples is automatically a reportable bare trust. Whether an arrangement creates a trust is a question of fact and law based on the specific circumstances and the applicable private law. The CRA recommends obtaining professional advice where the legal nature of an arrangement is unclear. Canada

Which Arrangements May Be Excluded?

Certain arrangements are excluded from being considered reportable bare trusts under the rules. These include specific circumstances involving:

• Certain joint accounts where the legal owners and beneficiaries meet the conditions in the legislation.
• Certain principal-residence arrangements involving related individuals.
• Certain arrangements involving spouses or common-law partners and property that may qualify as a principal residence.
• Certain partnership property arrangements where the applicable partnership reporting requirements are met.
• Property held pursuant to a court order and certain other specifically defined arrangements.

The exact conditions for each exclusion matter. An arrangement should not be assumed to be excluded simply because it resembles one of these examples. Canada

Even If You’re Reportable, You May Not Have to File

A reportable bare trust that qualifies as a “listed trust” for the taxation year generally does not have to file a T3 return or Schedule 15 solely because it is a reportable bare trust, unless the CRA requests a filing. Canada

Some of the most relevant listed-trust conditions include:

• Assets of $50,000 or less throughout the year: For taxation years ending on or after December 31, 2024, a trust may qualify as a listed trust where the total fair market value of its assets does not exceed $50,000 throughout the year. Under the current rules, this threshold is not restricted to particular asset types.
• The $250,000 family-related exemption: Certain trusts may qualify where each trustee is an individual, the beneficiaries meet the applicable relationship requirements, and the trust holds only qualifying assets with a total fair market value of no more than $250,000 throughout the year.
• Trusts that have existed for less than three months may also qualify as listed trusts.

The $250,000 rules contain specific conditions regarding the trustees, beneficiaries and types of assets that can be held. For taxation years ending on or after December 31, 2025, the rules also contain provisions for certain graduated rate estates. Canada

The key phrase is “throughout the year.”

For example, if an arrangement is relying on the $50,000 threshold and its assets are $45,000 at the beginning of the year but rise to $60,000 during the year, it would not satisfy the $50,000 “throughout the year” condition. Canada

The CRA’s Own Example

The CRA’s FAQ provides an example involving Amanda, who was added to her father’s bank account in 2026 to assist him with banking.

Amanda and her father determined, after consulting a lawyer, that the arrangement was an express trust and bare trust. Amanda could reasonably be considered to act as her father’s agent, while her father retained the use and benefit of the money.

The highest fair market value of the account during 2026 was approximately $16,000. Because the account remained below the applicable $50,000 threshold throughout 2026, the arrangement qualified as a listed trust and a T3 return and Schedule 15 were not required for 2026.

In 2027, the account balance increased substantially, reaching approximately $310,000. Because this exceeded the applicable $250,000 threshold, the arrangement was no longer a listed trust and a T3 return and Schedule 15 were required for 2027. Canada

What Gets Filed

If a reportable bare trust is required to file, it generally files a T3 Trust Income Tax and Information Return together with Schedule 15.

A reportable bare trust does not necessarily complete every section of the T3 return. The CRA identifies the applicable sections and lines that must be completed.

Income, capital gains and capital losses from property held under a bare trust are generally reported by the beneficial owner, rather than treated as income of the bare trust itself. Canada

Schedule 15 requires specified information about the trust’s reportable entities, which can include trustees, settlors, beneficiaries and controlling persons. Depending on the type of reportable entity, the information can include:

• Name and address
• Date of birth, where applicable
• Country of residence
• Tax identification number, where applicable

If there is no formal trust document naming the arrangement, the CRA provides guidance on how the trust name can be determined. For example, a trust may be named after the beneficial owner, such as “Jane Smith Trust.” Canada

Penalties

Failing to meet trust reporting requirements can result in penalties.

• Late filing: Where the applicable penalty is based on a return with no unpaid tax, the penalty can be $25 per day, with a minimum of $100 and a maximum of $2,500.
• Serious non-compliance: For a trust that is not a listed trust, knowingly or through circumstances amounting to gross negligence failing to file, or making a false statement or omission, can result in a penalty equal to the greater of $2,500 or 5% of the highest fair market value of the trust’s property during the year. Canada

The applicable penalty depends on the circumstances, so taxpayers should not assume that every late or incomplete filing will result in the same penalty.

What to Do Before December 31

1. Take inventory. Review property titles, joint accounts, “in trust for” accounts and nominee arrangements.
2. Determine whether each arrangement is actually a bare trust. Keep documentation explaining the nature of the arrangement and, where appropriate, obtain professional advice.
3. Check the applicable thresholds. Track the fair market value of assets throughout the year if an arrangement may rely on the $50,000 or $250,000 listed-trust conditions.
4. Gather beneficial ownership information early. Information required for Schedule 15 can involve several people.
5. Talk to a tax professional before year-end if you are unsure whether an arrangement is reportable.

The Bottom Line

Bare trusts do not have a T3/Schedule 15 filing requirement for the 2024 or 2025 taxation years. But 2026 is different.

Starting with taxation years ending on or after December 31, 2026, certain reportable bare trusts that are not listed trusts may have to file a T3 return and Schedule 15.

With the end of the 2026 tax year approaching, now is the time to determine whether an arrangement you have — such as a joint account, property title arrangement or nominee structure — could fall under the new rules.

Not sure whether you have a bare trust? Contact The TaxForce and we can help you review your reporting obligations before the deadline.

This article is for general information only and is not legal or tax advice. Your situation may differ.

Sources: Canada Revenue Agency, “Enhanced reporting rules for trusts and bare trusts: Frequently asked questions,” updated October 5, 2026; Canada Revenue Agency, “What has changed — Filing a trust’s T3 return,” updated October 5, 2026.