Do Bare Trusts Have to File a T3 and Schedule 15 in Canada?

If your name is on title to property that someone else really owns, you may be a bare trustee. The question many people ask is whether that means a T3 return and a Schedule 15 every year.

The answer depends on the year and on the kind of arrangement. This article walks through the timing, who is caught, what a filing involves and the penalties for getting it wrong.

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

The answer depends on the tax year

The first filings are due 90 days after year-end, which is March 31, 2027 for a December 31, 2026 year-end. If a due date falls on a weekend or CRA-recognized holiday, the next business day applies.

Which bare trusts are reportable

CRA describes a reportable bare trust as an express trust where a legal owner can reasonably be considered to act as agent for the beneficiaries, including an arrangement that would not otherwise be a trust under the Act. The statute is s. 150(1.3), under which the legal owner is deemed a trustee and the users or beneficiaries are deemed beneficiaries.

Not every arrangement is caught. Section 150(1.31) lists exceptions:

• Every beneficiary is also a legal owner and no legal owner is a non-beneficiary, such as a family joint bank account.
• Related individuals own real property that would be the principal residence of one or more of them, such as a parent on title for a child's mortgage.
• An individual holds real property for a spouse or common-law partner that would be the owner's principal residence.
• Property held solely for a partnership where a partnership return is filed, and property a court order requires the owner to hold.

A reportable bare trust that is also a listed trust is not required to file unless it is requested to file. Because whether a bare trust exists is a question of fact, CRA suggests consulting a legal advisor if you are unsure.

What a filing involves

On a T3 filed for a reportable bare trust, only the fields marked with a check mark need completing and the rest can be left blank. If there is no governing document name, CRA says to list the beneficial owner's legal name followed by the word "Trust".

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 such as tax identification numbers leaves the schedule incomplete, and CRA says the trust has not then met its filing obligations.

Schedule 15 is filed each year with the T3, even with no changes, though information already reported can be carried forward. Income, gains and losses from the property should still be reported on the beneficial owner's return.

Penalties for late or incomplete filing

The usual late-filing penalty is 5% of the unpaid tax when the return was due, plus 1% of that tax for each full month late, to a maximum of 12 months. A bare trust usually has no tax payable, so the likelier penalty is $25 a day, with a minimum of $100 and a maximum of $2,500.

• Repeat filers who were assessed a late-filing penalty after a demand in any of the three prior years may face 10% plus 2% a month, to a maximum of 20 months.
• A person who knowingly or with gross negligence makes a false statement or omission, or fails to file, for a non-listed trust faces the greater of $2,500 and 5% of the highest fair market value of the trust property.
• A person who fails to give their tax identification number to the trustee may face a $100 penalty for each failure.

What to do next

• Confirm your trust's year-end and whether it falls in a year when reporting applies.
• Decide, with a lawyer or accountant, whether your arrangement is a reportable bare trust or fits an exception.
• Start collecting names, addresses, dates of birth, countries of residence and SINs or other tax numbers for everyone involved.
• Diarize the due date: 90 days after year-end.
• Make sure the beneficial owner reports the income and gains on their own return.

Frequently asked questions