Bare Trust Reporting in Canada: What’s Changing for 2025 and What You Need to Know
Givens LLP | December 18, 2025
SHARE
The Canadian tax landscape has seen significant changes in recent years, and one area that has generated considerable confusion is bare trust reporting. If you are a taxpayer, advisor, or business owner, understanding these changes is critical to avoid unnecessary compliance headaches. Here is a comprehensive look at what’s happening in 2025.
What Is a Bare Trust?
A bare trust is a simple legal arrangement where a trustee holds legal title to property on behalf of a beneficiary but has no discretion over the assets. The trustee acts only on the beneficiary’s instructions. Common examples include:
- Parents co-signing a mortgage for an adult child.
- Adding a child’s name to a bank account for convenience.
- Nominee arrangements in real estate transactions.
In these cases, the beneficial owner retains full control and responsibility for income and capital gains, while the trustee is essentially a custodian.
Why the Rules Changed
Historically, bare trusts were not required to file a T3 return unless they had income or disposed of capital property. However, in 2022, the federal government introduced expanded trust reporting rules impacting 2023 filing years, aimed at improving transparency and combating tax evasion and money laundering. These rules required most trusts including bare trusts to file:
- T3 Income Tax and Information Return
- Schedule 15: Beneficial Ownership Information
The intent was good, but the impact was poorly administered. Thousands of Canadians with simple arrangements suddenly faced complex filing obligations.
Due to the added administrative burden and lack of clarity, the CRA waived the bare trust filing obligations for the 2023 and 2024 year and have clarified their position for years 2025 and onward.
What’s New for 2025?
Here is the latest information regarding these filings:
- Draft Legislation (August 2025): The Department of Finance proposed amendments to clarify which arrangements are caught by the rules. The goal is to reduce compliance burdens and exempt common scenarios like joint accounts and family homes.
- CRA’s Position: As of October 2025, the CRA announced that bare trusts will not be required to file for the 2025 tax year unless new legislation is enacted well in advance of the filing deadline. If the law isn’t finalized soon, the administrative waiver will continue.
- Proposed Exemptions:
- Trusts holding less than $50,000 in certain assets (cash and publicly traded shares).
- Short-term trusts (existing for less than three months).
- Certain regulated financial or lawyer-client trusts.
Summary Table of Key Exemptions (2025 and Beyond)
| Exemption Type | Description | Effective Year |
| $50,000 Small Trust | Any trust with ≤ $50,000 FMV in assets throughout the year (no asset-type restriction) | After Dec 30, 2024 |
| $250,000 Family Trust | All trustees/beneficiaries are related individuals, ≤ $250,000 FMV, only certain assets | After Dec 30, 2024 |
| Short-Term Trust | Trusts in existence < 3 months during the year | After Dec 30, 2024 |
| Regulated Trust Accounts | General trust accounts for regulated professionals; client-specific accounts ≤ $250,000 | After Dec 30, 2025 |
| Joint Accounts/Family Homes | All legal owners are also beneficiaries, or property is a principal residence of a related | After Dec 30, 2025 |
| Partnership Property | Property held for a partnership, all legal owners are partners, partnership return filed | After Dec 30, 2025 |
| Court-Ordered Trusts | Property held pursuant to a court order | After Dec 30, 2025 |
| Resource Property for Public | Canadian resource property held for public companies or their subsidiaries/partnerships | After Dec 30, 2025 |
| Non-Profit/Charity Trusts | All legal owners are charities/NPOs, property is government funds | After Dec 30, 2025 |
Who Might Still Be Affected?
Even with carve-outs, some arrangements will likely remain subject to reporting, including:
- Nominee Corporations: If a corporation is only holding property (like real estate) for someone else and doesn’t qualify for an exemption, it may need to file a trust return.
- Joint Ventures (Not Partnerships): If a joint venture isn’t considered a partnership for tax purposes and property is held in trust for the participants, reporting may be required unless another exemption applies.
- Complex Business Structures: Arrangements with multiple owners, layered entities, or property held for others could still trigger filing requirements.
- Bare Trusts Without Exemptions: If the legal and beneficial owners aren’t all related or the property isn’t a principal residence, the trust will likely need to file once the new rules take effect.
- Trusts with Non-Individual Beneficiaries: Trusts that have any beneficiary who isn’t an individual (except for certain estates) won’t qualify for the $250,000 family trust exemption.
- Lawyer-Client Specific Trusts: with a value that exceeds $250,000 throughout the year (for tax years ending after December 30, 2025).
Penalties for Non-Compliance
If the rules apply and you fail to file, penalties can be steep—up to $2,500 per return, plus additional penalties for false or incomplete information. While relief has been granted for prior years, it’s risky to assume exemptions will continue indefinitely.
Practical Tips for 2025
- Review Your Arrangements: If you’re listed on someone else’s property title or account, you may have a bare trust.
- Stay Updated: Monitor CRA announcements and legislative developments.
- Document Everything: Keep clear records of beneficial ownership.
- Seek Professional Advice: If in doubt, consult a tax advisor—especially for real estate or business structures.
The Bottom Line
Bare trust reporting rules remain in flux as the changes are proposals only and not yet law. While the CRA has provided temporary relief and proposed legislation aims to simplify compliance, uncertainty persists. The best approach? Stay informed, prepare early, and seek expert guidance. At Givens LLP we are here to help, book a call with us today to determine how the rules apply to you and determine your filing requirements.
