Bare trust reporting in Canada: Where the rules stand, which arrangements are caught, and who must file for 2026

Executive summary

After three consecutive years of last-minute relief and two rounds of draft legislation, the federal rules governing the reporting of bare trusts have finally been settled in legislation. Bill C-15, the Budget Implementation Act, 2025, No. 1, received Royal Assent on March 26, 2026, enacting a revised bare trust reporting regime.[1]

The practical effect of the revised regime can be stated in three points:

• No bare trust filings are required for the 2023, 2024 or 2025 taxation years. Bare trusts were not required to file a T3 return or Schedule 15 for those years, and no return is required for 2025 (which would otherwise have been due March 31, 2026), except where the Canada Revenue Agency (the “CRA“) makes a direct request.
• Certain bare trust arrangements will be required to file for the first time for the 2026 taxation year, with the first returns due March 31, 2027. The new rules apply to taxation years ending after December 30, 2026.
• The exemptions have been substantially broadened, but significant categories remain reportable. Joint spousal accounts, a parent on title to an adult child’s home, and general partners holding partnership property will generally be exempt. Nominee corporations holding real estate, bare trustees in joint ventures and developments among unrelated parties, and higher-value “in trust for” accounts will generally have to file.

Sections 4 and 5 of this bulletin describe, in practical terms, the arrangements typically characterized as bare trusts and work through which of them will have to file for 2026.

1. Background: The enhanced trust reporting rules

The enhanced trust reporting rules were enacted in December 2022 and first applied to trust taxation years ending after December 30, 2023.[2] Under these rules, most express trusts resident in Canada (and certain non-resident trusts) must file an annual T3 Trust Income Tax and Information Return even where the trust has no income or activity, unless the trust falls within a list of exempted “listed trusts.” Trusts required to file must also complete Schedule 15 – Beneficial Ownership Information of a Trust, disclosing the name, address, date of birth, jurisdiction of tax residence and taxpayer identification number of every trustee, beneficiary, settlor and any person with the ability to exert influence over trustee decisions on the appointment of income or capital.

The original legislation extended these obligations to bare trusts. The application of the rules to bare trusts proved unworkable, and the CRA granted relief in each of the first three years, while the Department of Finance redesigned the regime. That redesign is now law.

2. How we got here: Three years of relief

• March 28, 2024: Days before the initial filing deadline, the CRA announced that bare trusts would not be required to file a T3 return or Schedule 15 for the 2023 year unless directly requested, citing the “unintended impact” of the rules on Canadians.[3]
• October 29, 2024: The CRA extended the same relief to the 2024 taxation year.[4]
• December 16, 2025: The CRA confirmed that it did not expect bare trusts to file for the 2024 or 2025 taxation years, consistent with the legislation then before Parliament, and that certain bare trusts would be required to file for taxation years ending on or after December 31, 2026.[5]

In parallel, the Department of Finance released draft legislation on August 12, 2024, to replace the original bare trust rule with a more targeted regime, re-released the proposals with refinements on August 15, 2025 following the 2025 federal election, and announced in Budget 2025 (November 4, 2025) a one-year deferral of the new regime’s start date. Bill C-15 implemented that package.[6]

3. The enacted framework and effective dates

Bill C-15 restructures the regime in three stages. The repeal of the original bare trust rule is retroactive, which is why no filings are required for 2024 or 2025; the new obligation applies prospectively beginning with the 2026 year.

Under the new rule, an express trust is deemed to include an arrangement under which one or more persons (each a “legal owner”) hold legal ownership of property for the use of, or benefit of, one or more persons or partnerships, where the legal owner can reasonably be considered to act as agent for those persons or partnerships. Each legal owner is treated as a trustee and each beneficial owner as a beneficiary for reporting purposes.[7]

4. What is a bare trust? Common arrangements in practice

The defining feature of a bare trust is a separation of legal and beneficial ownership in which the legal owner has no independent responsibilities or discretion: the person on title (or on the account) holds the property strictly as agent and nominee, acts only on the direction of the beneficial owner, and must convey the property on demand. Where the titleholder has any meaningful independent power over the property, the arrangement is an ordinary trust, not a bare trust.[8]

Bare trusts arise far more often than clients realize, usually for financing, land registration, probate, privacy or administrative convenience rather than for tax reasons. Frequently, no written declaration of trust exists, the arrangement is evidenced only by the surrounding facts. The following are the categories we encounter most often in practice.

4.1 Real estate arrangements

• Nominee (titleholder) corporations. A single-purpose corporation holds registered title to land while beneficial ownership rests with one or more individuals, corporations, trusts or partnerships. These are ubiquitous in commercial real estate where they are used to simplify land-registry dealings, preserve confidentiality of beneficial ownership, facilitate financing, and permit transfers of beneficial interests without changing registered title (historically relevant to land transfer tax planning in some provinces).
• Joint ventures and co-ownerships. Unrelated co-venturers commonly hold development or income-producing property through a single nominee, with beneficial interests governed by a co-ownership or joint venture agreement. The nominee typically also holds the project bank account and contracts with third parties at the direction of the co-owners.
• Development and construction structures. Builders and developers routinely register title in a bare trustee to hold land through the entitlement and construction phases, including where a limited partnership is the beneficial owner (the limited partnership itself cannot hold registered title in some land registry systems).
• Parent on title to a child’s home. A parent is added to title (or goes on title alone) solely so the child can qualify for mortgage financing. The parent contributes nothing, receives nothing on sale, and holds their interest as nominee for the child.
• Child on title to a parent’s home or other assets. An adult child added to title to a parent’s home, cottage, or land to avoid probate fees on the parent’s death is a bare trust where beneficial ownership remains with the parent (which is also usually the intended position, to preserve the parent’s principal residence exemption and avoid a disposition on the change in title). [9]
• Farmland held in personal names. Farmland registered in the name of an individual (often for historical or lender reasons) but beneficially owned by, and farmed through, a family farm corporation or partnership.

4.2 Bank and investment accounts

• “In trust for” (ITF) accounts. Informal accounts opened by a parent or grandparent “in trust for” a minor child or grandchild, without a formal trust deed. Depending on the facts (in particular, who retains control and beneficial entitlement), these may be a bare trust for the contributor or an informal trust for the child.
• Joint accounts for convenience. An elderly parent adds an adult child to a bank or investment account so the child can pay bills and manage the account, with the funds remaining beneficially the parent’s. Canadian law presumes, in such transfers to adult children, that the child holds on resulting trust for the parent absent evidence of a gift which is functionally a bare trust.[10]
• Accounts and investments held by one person for another. A brokerage account, GIC or private company share registered in one person’s name but funded by and beneficially owned by another, including shares held by a nominee shareholder to satisfy corporate law or confidentiality objectives.

4.3 Business and commercial arrangements

• Partnership property held by a nominee or general partner. The standard structure for limited partnerships, where legal title to partnership property (land, equipment, vehicles, IP registrations) is held by the general partner or by a titleholder corporation for the partnership.
• Assets registered personally but owned by a corporation. Vehicles, licenses, permits or real property registered in a shareholder’s or employee’s personal name (often for licensing, insurance or lender reasons) while beneficial ownership rests with the corporation, and the reverse, where a corporation holds registered title to an asset beneficially owned by its shareholder.
• Closing, escrow and interim arrangements. Property held by one party for another pending completion of a purchase, reorganization or registration (e.g. where a vendor remains on title after closing pending land registry processing, or assets are held by a nominee pending a s. 85 rollover or amalgamation being completed).

4.4 What is not a bare trust

Not every separation of possession and ownership is a bare trust. A tenant, licensee or borrower is not a bare trustee. An executor administering an estate acts under a will, not as a nominee (a graduated rate estate is, in any event, a listed trust). A discretionary family trust, spousal trust, or alter ego trust is a true trust with its own T3 obligations, and those trusts have been filing, with Schedule 15, since the 2023 year. Where the legal owner has genuine independent duties or discretion, the arrangement is not “bare” at all.

5. Exemptions: Who will not have to file

5.1 General exemptions available to all trusts (“listed trusts”)

A trust that is a “listed trust” throughout the year is not required to file solely by reason of the reporting rules and, if it files for other reasons, is not required to complete Schedule 15. The principal categories include:

• trusts in existence for less than three months (which will shelter most closing and escrow arrangements);[11]
• trusts holding assets with a total fair market value not exceeding $50,000 throughout the year. The previous restriction limiting this exemption to money, government debt and listed securities has been removed, and it now applies regardless of asset type; [12]
• the family exemption: every trustee and beneficiary is an individual, each beneficiary is related to each trustee, and the trust’ property consists of qualifying low-risk assets (including money, deposits at Canadian financial institutions, GICs, listed securities, exempt life insurance policies and similar property), the fair market value of which does not exceed $250,000 throughout the year;[13]
• lawyers’ general trust accounts required under professional conduct rules (but not client-specific trust accounts with money and/or GICs with a fair market value that exceeds $250,000 at any point in the year);[14] or
• registered plans (RRSPs, RRIFs, TFSAs, RESPs, RDSPs, FHSAs, RPPs and similar), graduated rate estates, qualified disability trusts, registered charities, non-profit organizations, mutual fund trusts and related segregated fund trusts, employee ownership trusts, and certain retirement compensation arrangement trusts.[15]

5.2 Exemptions specific to bare trust arrangements (2026 onward)

The new regime also contains exemptions tailored to the everyday arrangements described in section 4. An arrangement is not required to report where, among other conditions:

• Mirror ownership: all legal owners are beneficiaries, and all beneficiaries are legal owners. This exception captures ordinary joint accounts between spouses and most true joint ownership where title and beneficial interest coincide;[16]
• Related individuals and a potential principal residence: the legal owners are individuals who are all related to each other, and the property is real property that could be designated as a principal residence of at least one of the legal owners. This exemption includes the parent-on-title-for-financing arrangement and, where the parent remains on title and ordinarily inhabits the home, the child-on-title-for-probate arrangement;[17]
• Spousal real property: an individual holds real property for the use or benefit of a spouse or common-law partner, where the property could be the holder’s principal residence;[18]
• Partnership property: each legal owner is a partner (other than a limited partner) holding the property solely for the partnership, where a T5013 partnership information return is required to be filed;[19] or
• Court-ordered and other arrangements: property held under matrimonial court orders (constructive trusts), Canadian resource property held for the benefit of public corporations, government funds held by non-profit organizations, and certain property held by a registered securities dealer or trust company in its capacity as trustee.[20]

6. Who will have to file for 2026

An arrangement that is a bare trust, is not covered by a bare-trust exemption, and is not a listed trust will be required to file a T3 return and Schedule 15 for its 2026 taxation year by March 31, 2027. [21] The filing requires a trust account number (which can and should be obtained in advance through the CRA’s online request process), and the Schedule 15 disclosure covers every legal owner (as trustee), every beneficial owner (as beneficiary), the settlor, and any person with influence over the arrangement.

Applying the exemptions to the common arrangements described in section 4 produces the following general picture. Every conclusion below depends on the precise facts with respect to who the legal and beneficial owners are, whether they are related, and asset values throughout the year:

Two practical points follow from this table. First, the reportable population for 2026 is dominated by corporate and commercial structures (nominee corporations, joint ventures, and development titleholders) rather than family arrangements. Second, the “depends” categories turn on valuation through the entire year: an account that starts the year at $45,000 and ends it at $60,000 does not satisfy the $50,000 exemption, because the threshold must be met throughout the year.

7. Penalties

Two penalties are relevant. The ordinary late-filing penalty is $25 per day, with a minimum of $100 and a maximum of $2,500 per return, even where the trust owes no tax. Where a failure to file is made knowingly or in circumstances amounting to gross negligence (including failure to respond to a demand to file), an additional penalty applies equal to the greater of $2,500 and 5% of the highest total fair market value of the trust’s property during the year.[22] The CRA’s relief for 2023 through 2025 eliminated penalty exposure for bare trusts that did not file in those years. Beginning with the 2026 taxation year, both penalties will apply in the normal course.

8. What clients should do now

With the first filing deadline of March 31, 2027, fixed in law, the second half of 2026 is the window in which to prepare. We recommend the following steps:

• Take inventory. Work through the categories in section 4: title searches and corporate minute books for nominee arrangements, account documentation for ITF and joint accounts, and joint venture and co-ownership agreements for commercial real estate. This is the highest-value step, and the one that takes the longest.
• Confirm characterization and document it. Whether a given arrangement is legally a bare trust remains a question of fact and law. Where no written declaration of trust exists, consider preparing one now, both to evidence the arrangement (relevant well beyond tax reporting) and to make the reporting analysis reliable. A short file memorandum recording why an arrangement is exempt may help to answer a future CRA inquiry as to why no return was filed.
• Map each arrangement against section 6 and track values throughout the year. For arrangements near the $50,000 or $250,000 thresholds, remember that the tests apply throughout the year. Monitor now rather than reconstructing valuations in early 2027.
• Obtain trust account numbers and collect beneficial ownership information for reportable arrangements. Schedule 15 requires names, addresses, dates of birth, tax residence, and taxpayer identification numbers for all reportable entities. This information can take months to assemble where multiple parties or non-residents are involved.
• Consider terminating redundant arrangements.  Although terminating a bare trust in 2026 may not dispense of the need to file in 2026, where a bare trust no longer serves its original purpose (e.g. a nominee corporation left over from a completed project, or a probate-planning transfer the client has reconsidered) terminating it avoids an obligation to file in 2027 and subsequent years (provided that terminating the bare trust is consistent with the client’s probate, financing, and commercial objectives).
• Monitor for further developments. Further administrative guidance may be provided by CRA before the 2027 filing season.

9. How we can help

Miller Thomson’s Tax lawyers can assist with reviewing existing structures against the new rules, confirming whether particular arrangements constitute bare trusts, preparing declarations of trust and exemption memoranda, and advising on restructuring or terminating bare trust arrangements before the end of 2026. Please contact any member of the Tax Group to discuss how these rules apply to your circumstances.

[1] Bill C-15, Budget Implementation Act, 2025, No. 1, S.C. 2026, c. 3 (Royal Assent March 26, 2026). See Department of Finance Canada, news release, “Legislation passes to implement Budget 2025: Canada Strong” (March 26, 2026); Parliament of Canada, LEGISinfo, Bill C-15 (45th Parl., 1st Sess.).

[2] Bill C-32, Fall Economic Statement Implementation Act, 2022, S.C. 2022, c. 19 (Royal Assent December 15, 2022), enacting subsections 150(1.1)–(1.4) of the Income Tax Act (Canada) (the “Act”) and section 204.2 of the Income Tax Regulations.  All statutory references herein are to provisions of the Act, unless otherwise noted.

[3] New – Bare trusts are exempt from trust reporting requirements for 2023. Despite the relief, the CRA subsequently reported that over 54,000 bare trust returns for the 2023 year had been filed by mid-April 2024, a concern examined by the Taxpayers’ Ombudsperson in “Unintended Consequences – Bare Trusts”.

[4] “Trust reporting for the 2024 tax year – Bare trusts not required to file the T3 Return and Schedule 15“.

[5] “Enhanced reporting rules for trusts and bare trusts: Frequently asked questions“;  and “Filing a trust’s T3 return – What has changed“.

[6] Department of Finance Canada, draft legislative proposals (August 12, 2024, and August 15, 2025); Budget 2025, “Canada Strong” (November 4, 2025).

[7] Subsections 150(1.3), (1.31) and (1.32) of the Act, as enacted by Bill C-15. The definition of “related persons” is expanded for these purposes to include aunts, uncles, nieces and nephews, and an individual is treated as related to himself or herself.

[8] The classic judicial descriptions are found in De Mond v. The Queen, 99 DTC 893 (TCC). Whether any particular arrangement constitutes a trust, and whether the trustee acts as agent for the beneficial owner, is a question of fact and law.

[9] Although outside the scope of this bulletin, it should be noted that there is generally a presumption of resulting trust on a gratuitous transfer of land to adult children (e.g. adding an adult child to legal title) such that beneficial ownership remains with the settlor (e.g. the parent); Pecore v. Pecore, 2007 SCC 17 [Pecore]. However, as it pertains to land in Saskatchewan, unless there is evidence to the contrary, adding an adult child to legal title generally presumes an intention of a gift; see e.g.  Dunnison Estate v. Dunnison, 2017 SKCA 40.

[10] Pecore, ibid. By contrast, a true joint account between spouses, where each holder is also a beneficial owner, will generally fall within the “mirror ownership” exemption described in section 5.2 below.

[11] Paragraph 150(1.2)(a).

[12] Paragraph 150(1.2)(b).

[13] Paragraph 150(1.2)(b.1).

[14] Paragraph 150(1.2)(c).

[15] Paragraph 150(1.2)(d)-(r).

[16] Paragraph 150(1.31)(a).

[17] Paragraph 150(1.31)(b).

[18] Paragraph 150(1.31)(c).

[19] Paragraph 150(1.3)(d).

[20] Paragraph 150(1.3)(e)-(h).

[21] For greater certainty, if a bare trust is neither exempt from filing nor a listed trust, it will likely still need to file a trust return even if it is terminated before the end of 2026.  See e.g. CRA Views, 2018-0744081C6, “Trust return due date on wind up” (2018 May 29). 

[22] Subsections 162(7) and 163(5)–(6) of the Act.