Bare Trust Reporting in 2026: What Canadian Families and Business Owners Need to Know

Many Canadians hold property for someone else without ever thinking of it as a trust. After several years of delays, bare trust reporting takes effect for the 2026 taxation year, with the first returns due March 31, 2027. Now is a good time to check whether any of your arrangements are caught.

What Is a Bare Trust?

A bare trust exists when one person holds legal title to property, while another person is the true beneficial owner. The legal owner is essentially a nominee with no real duties or control, and the beneficial owner can direct that title be transferred to them at any time.

In simple terms, the legal owner is a nominee. Their name is on the title or the account, but the property belongs to someone else.

A bare trust can exist without any written agreement, and without anyone intending to create one. Ordinary family and business arrangements can meet the definition simply because of how title is held.

Why Bare Trusts Matter in 2026

Bare trusts must file an annual T3 Trust Income Tax and Information Return with Schedule 15, which identifies the trustees, settlors, beneficiaries, and controlling persons.

The rules were legislated in 2022, but the CRA waived filing for the 2023, 2024, and 2025 taxation years. The 2026 taxation year is the first year bare trusts must actually file. Each bare trust needs its own CRA trust account number and a separate return.

Penalties for Not Filing

Penalties for not filing are assessed against the trustees, meaning the people or corporations on title:

$25 per day, with a minimum of $100 and a maximum of $2,500.
Where the failure is made knowingly or through gross negligence, the greater of $2,500 and 5% of the fair market value of the trust property. For a $1,000,000 rental property, that could reach $50,000.

Common Examples and Exemptions

Situations that may create a bare trust include:

A parent, child, or other relative added to the title of a home, cottage, or other real property for mortgage, probate, or convenience reasons.
Real estate or land held by a nominee individual or corporation for the true owner, a joint venture, or a partnership.
Bank or investment accounts held in one person’s name using another person’s funds.
A corporation holding vehicles, equipment, or investments for a shareholder or a related company.
Shares held by an individual to satisfy director or governance requirements, where the economic rights belong to someone else.
Any informal understanding that one person holds property for another.

Common Exemptions

Even where a bare trust exists, a filing is not always required. Common exemptions include:

Property with a market value of $50,000 or less at all times during the year.
Arrangements that have existed for less than three months.
Property with market value of $250,000 or less held among related individuals, provided it does not include private investments, precious metals, commodities, or cryptocurrency.
Arrangements where all legal owners are also beneficial owners, such as spouses on a joint account.
Related family members on title to a home that would qualify as the principal residence of one of them.
Property held in a registered plan, such as a Tax-Free Savings Account or a Registered Retirement Savings Plan.

Exemptions are tested each year, so an arrangement that is exempt now may become reportable later.

How Connectere CPA Can Help

At Connectere, we help families and business owners work through the bare trust rules well before the deadline. Our services include:

Reviewing your arrangements to identify potential bare trusts
Assessing exemptions and documenting our conclusions
Obtaining CRA trust account numbers where needed
Preparing and filing the T3 return and Schedule 15

If any of the situations above sound familiar, we would be happy to review your circumstances with you.

Bare trust filings often overlap with our estate planning and family trust services, personal tax services and corporate tax services. To get started, contact our Toronto CPA firm.

Disclaimer: This article is intended to provide general information only and should not be relied upon as tax or legal advice. Each situation should be evaluated based on its specific facts.