What Is a Bare Trust and Does BC Require Trust Reporting?

Many British Columbians hold property for someone else without ever calling it a trust. A parent may be on a child's home title to help with a mortgage, or an adult child may hold a bank account or a property for a parent. People then wonder whether this creates a trust that must be reported to the Canada Revenue Agency.

This article explains what a bare trust is, what the current reporting position looks like, and what to check before you decide. The rules in this area have been changing, so treat this as a starting point and confirm the current position.

This article covers the law of British Columbia.

What a bare trust is

The Income Tax Act does not define a bare trust. Under section 104(1), an arrangement may be treated as not a trust at all where the trustee acts as agent for all of the beneficiaries.

A trustee generally qualifies as an agent when the trustee has no significant powers, acts only on the beneficiaries' instructions and only holds legal title. In plain words, the name on title is a placeholder. The beneficiary decides what happens to the property.

If the person on title can make real decisions, such as when to sell, who benefits or how income is used, the arrangement may not be a bare trust. That is a question of fact and of the documents.

Does a bare trust have to file a T3 return?

For 2025 year-ends, the CRA does not expect bare trusts to file a T3 return with Schedule 15. Certain bare trusts may have to file for taxation years ending in 2026 and later. That later position is based on proposed Bill C-15 legislation, so check its current status before relying on it.

When a T3 return is required, it must be filed no later than 90 days after the trust's tax year-end, which is March 31 for a December 31 year-end. Any balance owing should be paid in the same 90 days.

Failing to include the specified information on the reportable entities of the trust, which is the Schedule 15 beneficial ownership information, may result in a late-filing penalty.

How a bare trust differs from other trusts

Not every trust holding property for family is bare. The table compares a bare trust with two trusts that the CRA describes in detail.

A trust that is not a bare trust is generally a different kind of trust with its own filing and tax consequences, and the 21-year rule can apply to many of them.

Other points to check in British Columbia

• How title is held. Land transferred to two or more people is held as tenants in common unless the transfer document shows a different intention, and unstated interests are presumed equal. This default does not apply to land transferred to personal representatives or trustees.
• Joint tenancy. When a joint tenant dies, the survivor takes the deceased's interest. A joint tenant can sever the joint tenancy, after which there is no survivorship.
• Gifts to adult children. A gratuitous transfer to an adult child is presumed to be held on resulting trust for the parent, and the child must prove the parent's intention to give.
• Other filings. Other provincial or federal disclosure rules may apply to land held for someone else, and whether they do depends on the facts.

The word bare trust is a tax label. It does not on its own settle who owns the property between family members, which turns on intention and the documents.

What to do next

• Write down who holds legal title, who is really entitled to the property and who gives instructions.
• Collect any written agreement, declaration of trust, loan documents and title search.
• Note whether the person on title has any power to decide, or only holds title.
• Check the CRA's current position for the tax year in question, because bare-trust reporting depends on legislation that may have changed.
• Speak to a lawyer or accountant before you file, or decide not to file, so the position matches your documents.

Frequently asked questions