Bare Trust Reporting for 2026: What You Should Know
After the 2022 expansion of trust reporting, the CRA provided filing relief for bare trusts for 2023 to 2025 unless a return was specifically requested. Following several years of relief and proposed changes, Bill C-15 received Royal Assent on March 26, 2026, bringing revised federal rules into law and narrowing the reporting requirements.
Under the revised rules, certain bare trusts are required to file a T3 return and Schedule 15 for tax years ending on or after December 31, 2026. For affected trusts with a December 31, 2026 year-end, the filing deadline is March 31, 2027.
Please note that bare trusts are deemed to have a calendar year-end of December 31. Accordingly, the 2026 filing requirement applies even if the bare trust arrangement was terminated during 2026, before December 31.
Who May Be Affected?
A bare trust is an arrangement where one person or entity legally owns property, but another controls and benefits from it. Common examples include adding a family member to your bank account to help manage your finances, being on a family member’s home title to help them qualify for a mortgage, or having a corporation hold title to property for you, your family trust or another company. These are only a few examples, and bare trusts can arise in many other ways. These arrangements are not automatically reportable, so it is important to review whether filing is required
Which Exemptions and Relief May Apply?
Bare trust exemptions may cover the following, subject to specific conditions:
- Mirror ownership: Legal owners and beneficiaries are the same people.
- Family principal residences: Related individuals hold legal title to property that could qualify as at least one owner’s principal residence.
- Spousal principal residences: An individual holds property for a spouse or common law partner that could qualify as the legal owner’s principal residence.
- Property held for a partnership: Any type of partnership may qualify if property is held solely for it, all legal owners are partners, and a partnership information return is required.
- Court orders: Property is held under a court order.
- Resource property: All or nearly all property is Canadian resource property held solely for qualifying public corporations or related corporations or partnerships.
- Government funding: A nonprofit holds government funds for the benefit of other nonprofits.
- Dealer or trust company nominees: A registered securities dealer or qualifying trust company holds only permitted investments and issues slips for all income and gains to every beneficiary.
If the exemptions above do not apply to your bare trust situation, you may still qualify for relief under the listed trust rules, which include certain newly created trusts and small trusts with qualifying assets.
Why Filing on Time Matters
Late filing can result in penalties of $25 per day, with a minimum of $100 and a maximum of $2,500 per return, even if no tax is owing. Knowingly failing to file or filing with gross negligence can result in an additional penalty equal to the greater of $2,500 and 5% of the highest total fair market value of the trust’s property during the year.
As a reminder, affected bare trusts with a December 31, 2026 year-end must file their T3 return and Schedule 15 by March 31, 2027.
Questions About Your Filing Requirements?
Whether you have a reportable bare trust depends on your specific circumstances, including who controls and benefits from the asset. If you have questions about how these changes apply to you or whether you need to file a bare trust return, please contact our office. We would be pleased to review your situation and help you prepare for any filing requirements.
