What Is a Bare Trust and Do I Need to Report It in Ontario?

A bare trust is an arrangement where the trustee can reasonably be considered to act as agent for all the beneficiaries and has no significant powers or responsibilities. Whether you must report one depends on the tax year and on several exceptions.

Bare trusts do not have to file a T3 return for tax years ending after December 31, 2024 and before December 31, 2026. For years ending on or after December 31, 2026, reportable bare trusts are subject to the trust reporting rules and may have to file. A bare trust is not reportable where every beneficiary is also a legal owner and no legal owner is excluded as a beneficiary, such as a joint bank account held by family members. It is also not reportable where related individuals hold title to real property that would be a beneficiary's principal residence, such as a parent on title for a child's mortgage. A spouse or common-law partner holding a shared principal residence for the other is also excepted, but not joint bank accounts.

Property held solely for a partnership whose partners are the legal owners, and property held under a court order, are also excepted. Because these rules are changing, confirm your situation with a lawyer or accountant.