Bare Trust Rules in Canada: T3 Filing and the Current Exemption
Updated
Canada’s enhanced trust reporting rules were originally announced to take effect for the 2023 tax year, requiring many bare trusts (arrangements where a trustee holds property but a beneficiary is the real owner – a parent on a child’s mortgage, a child on a parent’s bank account for convenience, a numbered company holding real estate) to file an annual T3 return and Schedule 15. CRA has since exempted bare trusts from this filing requirement for the 2023, 2024, and 2025 taxation years – if you have a bare trust arrangement, you do not need to file a T3 return for those years (for 2023, unless CRA makes a direct request). Starting with the 2026 taxation year, certain “reportable bare trusts” will become subject to the rules, and CRA has now published the definition and the exceptions. This page is part of the corporate, trust and estate tax guides.
No filing expected – CRA does not expect a T3 return (incl. Schedule 15) unless it makes a direct request (announced March 28, 2024)
2024
Exempt – bare trusts are not subject to the trust reporting rules for taxation years ending on or after Dec 31, 2024 and before Dec 31, 2026
2025
Exempt – same blanket exemption covers taxation years ending in this window
2026
Certain “reportable bare trusts” become subject to the rules under subsection 150(1.3), subject to exceptions in subsection 150(1.31)
2027+
Reportable bare trusts stay subject to the rules
Source: canada.ca, “Enhanced reporting rules for trusts and bare trusts: Frequently asked questions,” last checked against the page updated October 5, 2026. Confirm the latest guidance before relying on any filing requirement described here.
What This Means Right Now
Because reportable bare trusts are subject to the rules only for taxation years ending on or after December 31, 2026, no bare trust is currently required to file a T3 return or Schedule 15 based on the ordinary trust reporting rules – and that has been the position for every taxation year since the rules were introduced. For 2023, CRA said it does not expect a return unless it makes a direct request.
Who May Need to File Starting 2026
Category
Status
Most bare trusts (2023-2025)
No filing required (for 2023, unless CRA makes a direct request)
“Reportable bare trusts” (2026+)
Subject to rules under s.150(1.3), exceptions in s.150(1.31) – definition and exceptions are in CRA FAQ question 3.1
Bare trust CRA directly requests a filing from
For 2023, CRA said it would not require a return unless it makes a direct request; a reportable bare trust that is a listed trust (2026+) files only if requested
Certain lawyer trust accounts
Lawyer general trust accounts are listed trusts; a specific client trust account only if it holds only money up to $250,000 (2024 onward)
RRSP/RRIF/TFSA trusts
Exempt (listed trusts)
Filing Requirements (If and When Filing Applies)
The mechanics below describe how a T3/Schedule 15 filing would work if a bare trust is required to file – either because CRA made a direct request for the 2023 year, or because it becomes a “reportable bare trust” starting with the 2026 taxation year.
What to Report
Information
Required
Trust identification
Name, address
Trustees
Names, addresses, DOB (individuals), country of residence, tax ID number
Beneficiaries
Names, addresses, DOB (individuals), country of residence, tax ID number
Settlors
Names, addresses, DOB (individuals), country of residence, tax ID number
Deadline
Due Date
Details
90 days after year end
March 31 for Dec 31 year end
Currently applicable to
Reportable bare trusts that are not listed trusts, for taxation years ending on or after December 31, 2026 (and, for 2023, a bare trust CRA directly asked)
Exemptions
Currently, the exemption for 2023-2025 taxation years means no bare trust needs to file for those years (for 2023, unless CRA makes a direct request) – the table below lists the main exceptions, which differ by year (the row notes say which years); from the 2026 taxation year a reportable bare trust that is a listed trust is not required to file a T3 return unless CRA asks, and CRA’s FAQ (question 3.1) lists further exceptions for reportable bare trusts.
Exemptions Considered Under the Original (Pre-Exemption) Rules
Exemption
Details
Under $50,000
Total FMV of assets not over $50,000 throughout the year (for 2023, only if the assets are limited types such as money and listed securities)
Less than 3 months
Existed <3 months at year end
Lawyer trust accounts
General trust accounts (from 2024, also a specific client account holding only money up to $250,000)
Certain registered accounts
RRSP, TFSA, RESP, etc.
Mutual fund trusts
Listed trust
Principal residence
From 2026, an exception for reportable bare trusts: related individuals holding real property that would be a legal owner’s principal residence
$50,000 Threshold (Listed-Trust Exception)
Calculation
Rule
Test
FMV at any point in year
If exceeded ever
Would lose this exception (other listed-trust exceptions could still apply)
If always under
Meets this exception (for 2023, only if the trust held only the listed asset types)
A reportable bare trust that is a listed trust, including one under this $50,000 threshold, is not required to file a T3 return unless CRA asks it to.
Common Situations
None of the situations below require a T3 filing for the 2024 or 2025 taxation years, or for 2023 unless CRA asked for one – they illustrate what would typically constitute a bare trust that may have to file for taxation years ending on or after December 31, 2026, if it is a “reportable bare trust”.
Parent Holding Property for Child
Situation
Details
Parent on title
For financing purposes
Child is real owner
Paid for property
Bare trust exists
Not currently required to file (2023-2025 exemption); confirm 2026+ status
Adult Child Holding for Parent
Situation
Details
Child on title
For probate avoidance
Parent is real owner
Beneficial owner
Bare trust exists
Not currently required to file (2023-2025 exemption); confirm 2026+ status
Joint Bank Accounts
Type
Bare Trust?
Spouse joint account
Usually no (true joint)
Parent-child “convenience”
Often yes
Business partner
Depends on arrangement
Real Estate Nominee
Situation
Filing?
Numbered company holds real estate
A bare trust exists only if the company holds title as agent for the real owner; if so, not required to file for 2024 or 2025
Individual is beneficial owner
Confirm 2026+ status against CRA’s reportable bare trust definition (FAQ question 3.1)
Penalties (If a Filing Requirement Applies)
These penalties apply only if a bare trust is actually required to file – either because CRA asked for a 2023 filing, or because it is a “reportable bare trust” for a taxation year ending on or after December 31, 2026. They do not apply to bare trusts for taxation years ending in 2024 or 2025, and for 2023 only if CRA asked for a filing.
Late Filing
Penalty
Amount
Base
$25 per day late (when no tax is owing)
Minimum
$100
Maximum
$2,500
Gross Negligence
Penalty
Amount
Rate
5% of highest FMV
Minimum
$2,500
Maximum
No cap stated (the penalty is the greater of $2,500 and 5% of the highest FMV)
Example Penalties
Property Value
Late (max)
Gross Negligence
$100,000
$2,500
$5,000
$500,000
$2,500
$25,000
$1,000,000
$2,500
$50,000
How to File (If a Filing Requirement Applies)
The steps below apply only if CRA directly requested a 2023 filing from your bare trust, or if your trust is a “reportable bare trust” for a taxation year ending on or after December 31, 2026 and is not a listed trust.
T3 Trust Return
Step
Action
1
Get the T3 forms for the trust’s province or territory, and a trust account number if it has none
2
Complete Schedule 15
3
Provide required information
4
File by deadline
Schedule 15
Information
Required for
Trustees
All of them
Beneficiaries
Each one known or findable with reasonable effort; otherwise a description of the class
Settlors
Anyone who transferred property to the trust (other than for fair market value or under a legal obligation)
Controlling persons
Anyone able to influence the trustee’s decisions on the trust’s income or capital
Voluntary (no audit or investigation started on the same information) and at least one year past the filing due date
Benefit
Possible penalty relief
CRA’s Position
Factor
Consideration
Good faith
May help
Never intended trust
Document arrangement
Seek professional advice
Get proper guidance
Avoiding Bare Trust Issues
Documentation Tips
Tip
Why
Written agreements
Clarify ownership
Document contributions
Who paid for what
Keep records
Transactions, decisions
Review arrangements
May need restructuring
Alternative Structures
Instead Of
Consider
Bare trust
Joint tenancy (real joint ownership)
Parent on title
Proper mortgage arrangements
Holding companies
Still may be bare trust
Nothing
Sometimes filing is simplest
Professional Advice Recommended
When to Get Help
Situation
Why
Real estate arrangements
Determine if bare trust exists
Parent-child property
Complex rules
Business structures
Corporate arrangements
Uncertainty
Penalties are significant
Who Can Help
Professional
Service
Tax accountant
Filing and compliance
Tax lawyer
Structure advice, disputes
Estate planner
Arrangement review
Summary
Key Takeaways
Point
Details
No filing required now
Bare trusts are not required to file a T3 return or Schedule 15 for taxation years ending in 2024 or 2025, or for 2023 unless CRA asks
2026 taxation year changes this
“Reportable bare trusts” become subject to the rules for taxation years ending on or after December 31, 2026, and CRA’s FAQ now describes what counts as one and its exceptions
Penalties don’t apply today
The $25/day and 5%-of-FMV penalties only apply if a filing is actually required
Confirm before filing season
CRA’s FAQ sets out what a reportable bare trust is and its exceptions; it applies to trusts with taxation years ending on or after Dec 31, 2026
The Bottom Line
If you’re on someone else’s property title, hold a bank account in your name for a family member’s benefit, or use a nominee corporation for real estate, you likely have a bare trust arrangement – but you do not currently need to file a T3 return for it. CRA does not require bare trusts to file a T3 return or Schedule 15 for taxation years ending in 2024 or 2025, and for 2023 it would require one only on a direct request. Starting with the 2026 taxation year, certain “reportable bare trusts” will become subject to the rules, and CRA’s FAQ now describes what counts as one and which arrangements are excluded (such as a joint account held for the owners’ own use and benefit) – read it before the T3 filing season for trusts with taxation years ending December 31, 2026. Older articles describing the original 2023 proposal no longer reflect the filing requirement; a tax professional can confirm how the rules apply to a specific arrangement.