Bare Trust Reporting in Canada: What’s Changing for 2026 and What You Need to Know
Givens LLP | October 22, 2026
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The Canadian tax landscape has seen significant changes in recent years, and one area that has generated considerable confusion is bare trust reporting. Following several years of relief and legislative changes, certain bare trusts will now be subject to reporting requirements for 2026.
If you are a taxpayer, advisor, or business owner, understanding these changes can help you prepare and avoid unnecessary compliance headaches. Here is what you need to know.
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 may include:
- A parent added to an adult child’s property title solely to help obtain financing.
- Adding a child’s name to a bank account for convenience, while the funds continue to belong to the parent.
- A nominee corporation holding title to real estate for another person or business.
In these cases, the beneficial owner retains the benefits and responsibilities of ownership, including reporting the related income and capital gains. The trustee essentially holds legal title on their behalf.
Having an arrangement like this does not automatically mean a trust return is required. Several exclusions and exemptions may apply.
Why the Rules Changed
The federal government introduced expanded trust reporting rules beginning with the 2023 taxation year to improve transparency around beneficial ownership. These rules brought many bare trusts into the reporting system, requiring a:
- T3 Trust Income Tax and Information Return.
- Schedule 15: Beneficial Ownership Information of a Trust.
The changes created confusion and added compliance obligations for Canadians with everyday family and business arrangements.
CRA provided administrative relief for 2023, generally unless it specifically requested a return. Subsequent legislative amendments removed bare trust reporting requirements for 2024 and 2025 and established revised rules beginning in 2026.
What’s New for 2026?
Since our 2025 update, there have been two important developments:
- The legislation is now law. Bill C-15 received Royal Assent on March 26, 2026, clarifying which bare trusts fall within the reporting rules and providing exclusions for certain common arrangements.
- CRA has confirmed implementation. On October 5, 2026, CRA confirmed that certain bare trusts may need to file a T3 return, including Schedule 15, for taxation years ending on or after December 31, 2026.
For bare trusts with a December 31, 2026 year-end that are required to file, the filing deadline is March 31, 2027.
Summary of Common Exclusions and Exemptions
The revised rules provide relief for many everyday arrangements. Common exclusions and exemptions include:
| Arrangement | General description |
| Small trusts | Trusts holding assets with a total fair market value of $50,000 or less throughout the year. |
| Certain family trusts |
Trusts holding only eligible assets worth $250,000 or less throughout the year, subject to specific trustee, beneficiary and relationship requirements. |
Short-term trusts |
Trusts in existence for less than three months during the year. |
|
Certain joint ownership arrangements |
Arrangements where the legal owners and beneficial owners are the same people. |
|
Certain family homes
|
Qualifying principal-residence arrangements involving related individuals or spouses/common-law partners. |
| Certain professional trust accounts
|
General trust accounts and qualifying client-specific accounts, subject to asset and value requirements.
|
| Certain partnership or court-ordered arrangements
|
Property held for a partnership that meets the required conditions, or property held under a court order.
|
This is a general summary. Each exclusion or exemption has conditions that should be reviewed before deciding whether a return is required.
Who Might Still Be Affected?
Even with these exclusions and exemptions, some arrangements may still require reporting, including:
- Nominee corporations: Corporations holding property for another person or business.
- Joint ventures: Property held for participants where the arrangement is not a partnership.
- Business ownership arrangements: Situations where legal title and beneficial ownership are held by different people or entities.
- Client-specific professional trust accounts: Accounts that do not meet the applicable asset and value conditions.
The key is to review the arrangement and available exemptions rather than assume that all family arrangements are exempt or all business arrangements must file.
Penalties for Non-Compliance
Failing to file a required return can result in penalties, even when no tax is owing. A late-filing penalty of $25 per day may apply, with a minimum of $100 and a maximum of $2,500.
More significant penalties can apply in serious cases, including knowing or grossly negligent failures to file or false statements, or failure to comply with a CRA demand. These may include a 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.
Practical Tips for 2026
- Review your arrangements. If you are listed on someone else’s property title or financial account, consider whether you hold that property on their behalf.
- Gather the information. We have developed a Bare Trust Identification Checklist to help you gather the information we need to assess your arrangement and determine whether a T3 return is required. You do not need to determine whether a bare trust exists before completing it.
- Keep clear records. Document who owns and benefits from the property, why the arrangement exists, and when it began.
- Seek advice early. Reviewing your arrangement before the filing deadline gives you time to confirm any exemptions and prepare a return if needed.
The Bottom Line
Bare trust reporting requirements are moving forward for 2026, but many common arrangements qualify for exclusions or exemptions. Understanding how the rules apply to your situation can help you meet your obligations and avoid unnecessary filings.
At Givens LLP, we are here to help. Click here for a copy of our: Bare Trust Identification Checklist or book a call to discuss your arrangement and filing requirements.
