Which Bare Trusts Are Exempt From T3 Reporting in Canada?

Many Canadians hold property in someone else's name, or have someone on title with them. A parent may co-sign a child's mortgage, or a family member may be added to a bank account. Starting with the 2026 tax year, the federal rules on reporting these arrangements are changing, and you may wonder whether yours is caught.

This article walks through the deemed-trust rule, then the exceptions that take certain arrangements out of it. It covers federal tax rules only. It is general information, not advice on your own situation.

This article covers Canadian federal tax law, which applies in every province.

The rule that creates the reporting duty

The Income Tax Act does not define a bare trust. CRA uses the term for an arrangement where the trustee acts as agent for all the beneficiaries, and such an arrangement is generally treated as not being a trust for the Act's purposes, with some exceptions. A bare trustee typically has no significant powers, cannot act without the beneficiary's instructions, and only holds legal title.

Section 150(1.3) of the Income Tax Act changes the picture for reporting. For section 150 purposes, an express trust includes an arrangement where a legal owner holds property for the use or benefit of others and can reasonably be considered to act as their agent. The legal owner is deemed a trustee and the others are deemed beneficiaries. Bill C-15 received royal assent on March 26, 2026, and the Act contains the new s. 150(1.3) and (1.31).

CRA calls this a reportable bare trust. It can include an arrangement that would not otherwise be a trust under the Act. Reportable bare trusts are subject to the trust reporting rules for taxation years ending on or after December 31, 2026.

Exceptions for joint owners and family homes

Section 150(1.31) lists situations where the deemed-trust rule does not apply. The first three are the ones most families run into.

• Every beneficiary is also a legal owner, and no legal owner is a non-beneficiary. CRA's example is a joint bank account held by family members for the use and benefit of each of them.
• The legal owners are related individuals and the property is real property that would be the principal residence of one or more of them. CRA says this covers a parent on title so a child can obtain a mortgage.
• An individual holds real property for the use of a spouse or common-law partner, and it would be the owner's principal residence. CRA's example is spouses jointly occupying a family home with only one on title.

For the principal residence exception, related persons include individuals connected by blood relationship, marriage, common-law partnership or adoption. Whether the property truly qualifies as a principal residence depends on the facts, so it is worth confirming if your situation is not a plain one.

Other listed exceptions

Section 150(1.31) also excludes the following arrangements:

Separately, a reportable bare trust that is also a listed trust is not required to file unless it is requested to file.

Timing: what applies now and when filing starts

• For taxation years ending in 2025, CRA does not expect bare trusts to file a T3 return, including Schedule 15.
• CRA's guidance says bare trusts are not subject to the trust reporting rules for taxation years ending on or after December 31, 2024 and before December 31, 2026.
• The first returns are for the 2026 year. They are due 90 days after year-end, which is March 31, 2027 for a December 31, 2026 year-end.

Even for a reportable bare trust, income, capital gains and capital losses from the trust property should be reported on the beneficial owner's tax return, not on the trust's T3.

If no exception fits: what to do next

CRA says it cannot give legal advice or definitive determinations on whether a trust exists. Whether a bare trust exists is a question of fact, and CRA suggests consulting a legal advisor if you are unsure.

If you fall outside every exception, timing matters. CRA says bare trusts are not subject to the trust reporting rules, and so need not file a T3 or Schedule 15, for taxation years ending on or after December 31, 2024 and before December 31, 2026. A bare trust that is not required to file for 2025 has nothing to file. For years when filing does apply, Schedule 15 asks for the name, address, date of birth for individuals, country of residence and a tax identification number for all trustees, settlors, beneficiaries and controlling persons. Missing information leaves the schedule incomplete, and the trust has not met its filing obligations.

If the return is late and the trust has no unpaid tax on the due date, the alternative late-filing penalty is $25 a day, with a minimum of $100 and a maximum of $2,500. A bare trust usually has no tax payable, so this is the likely penalty.

• List each property held in one person's name for another's benefit.
• Note who the legal owners and beneficiaries are, and how they are related.
• Check each against the s. 150(1.31) exceptions above.
• Gather names, addresses, dates of birth and SINs for everyone involved.
• Mark March 31, 2027 for a December 31, 2026 year-end.
• Ask a lawyer or accountant to confirm whether a bare trust exists if the facts are unclear.

Frequently asked questions