Ontario Bare Trust Reporting for Estates and Family Property

A bare trust is an arrangement where one person holds legal title to property for someone else who is really entitled to it. It comes up often in families, for example when a parent is on title to a home for an adult child, and sometimes in estates.

Many people want to know whether they must file a T3 trust return. The rules have shifted in recent years and the Canada Revenue Agency (CRA) has indicated that recent legislative amendments changed the trust reporting rules, so check the current CRA guidance or ask an accountant before you rely on this article.

What a bare trust is in plain words

In a bare trust, the person who holds legal title has no real say over the property. They simply hold it for the person who is entitled to it and must transfer it on request. Typical examples include a parent added to a child's bank account or home title to help with a mortgage or to avoid paperwork, or a person holding property for a relative.

These arrangements are often informal and may not be written down. That can make it easy to miss the tax reporting that may apply.

The current filing position

Bare trusts do not have to file a T3 return or Schedule 15 for taxation years ending on or after December 31, 2024 and before December 31, 2026. For 2023, they were excused unless the CRA asked directly.

That relief is temporary. Reportable bare trusts may have to file a T3 return, including Schedule 15, for taxation years ending on or after December 31, 2026. Because the CRA has signalled that recent legislative amendments changed the trust reporting rules, confirm the current position before the 2026 year-end.

Arrangements that are not reportable bare trusts

Not every bare trust is reportable. The following are not reportable bare trusts:

• Arrangements where each beneficiary is also a legal owner.
• Arrangements where the legal owners are related individuals and the property is a principal residence.
• Property the legal owner holds because a court order requires it.

So a parent and adult child who are both on title to the family home may fall outside the reporting rules, while a parent holding an investment account for a child who is not an owner may need a closer look. Whether an exclusion applies depends on the facts.

Estates and other trusts are a different question

Do not confuse a bare trust with the estate itself. An estate has its own tax rules. A trust that has existed for less than three months, or whose assets never exceed $50,000 in fair market value during the year, is a listed trust and need not file Schedule 15 unless asked. A graduated rate estate is also a listed trust, but it may still have to file a T3 return.

The estate's T3 return is due 90 days after the trust's tax year-end. An estate stops being a graduated rate estate if it still exists 36 months after the death. After that point, the tax treatment changes, which is one reason not to leave an estate open longer than necessary.

What to do next

• List every property held in someone's name for another person, including accounts, homes and investments.
• Note who the legal owners are, who is really entitled, and whether they are related.
• Check whether an exclusion applies, such as every beneficiary also being a legal owner, or related owners of a principal residence.
• Check the current CRA guidance before any year-end on or after December 31, 2026.
• If you are an executor, confirm whether the estate is a graduated rate estate and when its T3 is due.
• Ask an accountant or lawyer to confirm filing duties before the deadline.

Frequently asked questions