Do I Have to File a T3 for a Bare Trust in Ontario?

It is common for a parent to hold a home or an account in an adult child's name, or for an adult child to hold property for a parent. Often the name on title is just a convenience, and the real owner is someone else. For tax reporting, that arrangement can be a bare trust.

This article explains what a bare trust is, when it must file a T3 return, which family arrangements are excluded, and what the penalties look like. These rules have changed recently, so confirm the current position with an accountant or lawyer before a deadline.

What counts as a bare trust

For reporting purposes, a reportable bare trust is an express trust where the legal owner can reasonably be considered to act as an agent for the beneficiaries. In plain words, someone holds legal title to property but acts on behalf of the people who really own it.

Examples people ask about include a child on title to a parent's property who simply follows the parent's instructions, or a person holding a bank account for someone else. Whether your arrangement fits depends on the facts, including what you agreed and who controls the property.

Do you have to file right now?

Bare trusts are not required to file a T3, including Schedule 15, for taxation years ending on or after December 31, 2024 and before December 31, 2026. The same rule says certain bare trusts may have to file for years ending on or after December 31, 2026.

That means the next filing question may arise for the year-end that falls on or after December 31, 2026. Bare trust reporting has been in flux, so check with a professional on whether your arrangement is caught and what the latest guidance says.

Arrangements that are excluded

Not every bare trust has to report. Bare trusts are excluded where all of the legal owners are also beneficiaries. They are also excluded where related individual legal owners hold a principal residence for their own use.

Related persons include those connected by blood, marriage, common-law partnership or adoption. For year-ends in 2025 and later, aunts, uncles, nieces and nephews are included too.

• A parent and adult child who are both on title and both beneficial owners may fall within the first exclusion.
• Related individuals holding a home they use as their own principal residence may fall within the second.
• A child holding an investment account only as a convenience for a parent, with no ownership of their own, is the kind of case that needs a closer look.

The exclusions are narrow and the wording matters, so do not assume yours applies without checking.

What a filing looks like and what happens if you miss it

For a reportable bare trust, the rest of the T3 can generally be left blank apart from Schedule 15, and the income is reported on the beneficial owner's own return. Schedule 15 lists beneficial ownership information on each reportable entity, which means trustees, settlors, beneficiaries and controlling persons. A T3 and any balance owing are due no later than 90 days after the trust's year-end.

If a T3 is filed late and there is no unpaid tax at the deadline, the penalty is $25 a day, with a minimum of $100 and a maximum of $2,500. A person who knowingly or through gross negligence makes a false statement or omission, or fails to file, under the trust reporting rules may face a penalty of the greater of $2,500 and 5% of the highest fair market value of trust property in the year. That heavier penalty does not apply to listed trusts.

What to do next

Start by working out whether you have a bare trust at all, then whether an exclusion fits, and then what date the next year-end falls on.

• List every property or account where the name on title is not the person who really owns it.
• Write down who controls it, who pays the costs and who reports the income.
• Check whether all legal owners are also beneficiaries, or whether the home exclusion could apply.
• Note the trust's year-end and whether it ends on or after December 31, 2026.
• Speak with an accountant or lawyer about current CRA guidance before the deadline.
• Keep records of any agreement or instructions between the owners.

Frequently asked questions