Bare Trusts and Trust Reporting Rules for BC Residents

Families often put property in someone else's name for convenience, such as a child holding title for a parent. That arrangement is sometimes called a bare trust, and people ask whether it means filing a T3 return.

The answer has changed in recent years and may change again. This article explains what a bare trust is and what the CRA has said about reporting, and why you should check the current position before you file or skip a filing.

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 where the trustee acts as agent for all beneficiaries.

A trustee generally qualifies as an agent when they have no significant powers, act only on the beneficiaries' instructions and only hold legal title. In plain words, you hold the name on the title, but someone else makes the decisions.

Do you 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 requirement is based on proposed Bill C-15 legislation.

Because that relief rests on a CRA administrative position and proposed legislation, check the CRA's current guidance before you rely on it. Whether your arrangement is truly a bare trust is a separate question that depends on the facts.

What the trust reporting rules involve

When a trust must file, the T3 return is due 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.

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

• For 2025 year-ends the CRA does not expect bare trusts to file a T3 return with Schedule 15, so check the CRA's current guidance before relying on that.
• A trust that is required to file faces a 90-day deadline.
• Missing Schedule 15 information may bring a late-filing penalty.

Bare trusts compared with other trusts

A bare trust is quite different from a trust where the trustee has real powers. For example, a testamentary trust is generally created on and as a result of a death, and an inter vivos trust is any trust that is not testamentary. Those trusts usually have a trustee making decisions, which is not the case for a bare trust.

Some trusts are set up for older people. An alter ego trust (CRA code 336) is created after 1999 by a settlor aged 65 or older, who must receive all trust income during their lifetime and be the only person who can receive income or capital from the trust during that time. A joint spousal or common-law partner trust (CRA code 335) is also created after 1999 by a settlor aged 65 or older. The settlor and their spouse or common-law partner receive all income until the later of their deaths, and only those two can receive income or capital before then. Both are inter vivos trusts.

Every trust is generally deemed to dispose of most capital property at fair market value on the day 21 years after certain dates (the 21-year rule). For alter ego and joint partner trusts, the deemed disposition day is instead the death of the settlor, or the later death of the settlor and spouse or common-law partner. However, a trust is not treated as an alter ego trust if it elects so on its T3 return for its first tax year.

If the trustee can decide who gets what, or when, the arrangement probably is not a bare trust, and the ordinary trust filing rules may apply.

Joint accounts with an adult child

A common family version of this situation is adding an adult child to a parent's bank account. In Pecore v. Pecore, 2007 SCC 17, a gratuitous transfer to an adult child, including adding them to a joint account, is presumed to be held on resulting trust for the parent. The survivor must prove the parent intended to give them the right of survivorship in the balance.

The judge weighs all the evidence on a balance of probabilities to find the transferor's actual intention at the time of the transfer. The presumption of advancement (gift) does not apply to adult children, and dependency of an adult child on the parent can be strong evidence against the resulting trust presumption. Evidence of use and control of the account is of marginal help and not determinative alone. How this applies depends on your situation, so it is worth confirming with a lawyer.

What to do next

• Write down who holds title, who gives instructions and who benefits.
• Check whether the trustee has any real powers or acts only on instructions.
• Look up the CRA's current guidance for the year you are filing.
• Note the trust's year-end and the 90-day filing deadline.
• Ask an accountant or lawyer to confirm whether you must file.

If you hold property for a parent or child, a short written record of the arrangement can help you and an advisor see how it works.

Frequently asked questions