How to File a T3 Return for a Bare Trust in Canada, Step by Step

A bare trust is a simple arrangement: one person holds legal title to property, but only on behalf of someone else. For years, these arrangements sat outside the T3 filing system. That is changing, and many people who hold a home, a bank account or an investment for a family member are asking whether they now have to file.

This article walks through the steps in the order you would likely follow them. It explains how to decide whether you must file, what information to gather, how to fill in the T3, and when to file. It is general information, and whether a bare trust exists in your case is a question of fact.

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

Step 1: Decide whether you actually have a bare trust

The Income Tax Act does not define a bare trust. CRA uses the term for an arrangement where the trustee acts as agent for all the beneficiaries. A trustee generally qualifies as an agent when the trustee has no significant powers, cannot act without the beneficiary's instructions, and only holds legal title.

CRA says it cannot give definitive determinations on whether a trust exists, and that whether a bare trust exists is a question of fact. It suggests speaking with a legal advisor if you are unsure.

Step 2: Check whether you are reportable, and for which year

A reportable bare trust is an express trust where the legal owner can reasonably be considered to act as agent for the beneficiaries. It can include an arrangement that would not otherwise be a trust under the Act.

Timing matters. Bare trusts need not file a T3 or Schedule 15 for taxation years ending on or after December 31, 2024 and before December 31, 2026. For 2025 specifically, CRA does not expect bare trusts to file. Reportable bare trusts are subject to the rules for taxation years ending on or after December 31, 2026.

Several arrangements are excluded from the deemed-trust rule. The table below summarizes some of them.

Step 3: Gather the Schedule 15 information

Schedule 15 asks for specified information on all trustees, settlors, beneficiaries and controlling persons: name, address, date of birth for individuals, country of residence and a tax identification number. A settlor is the person who set up the trust by contributing property.

Do not leave gaps. CRA says missing information, such as tax identification numbers, leaves the schedule incomplete and means the trust has not met its filing obligations. A person who fails to give their tax identification number, such as a SIN, to the trustee may face a $100 penalty for each failure. Ask the beneficial owner for these details early.

• Full legal names and addresses of the trustee and beneficiary
• Dates of birth for each individual
• Country of residence for each person
• SIN or other tax identification number for each person
• Any trust document, or a written note of the arrangement
• The trust's year-end

Complete the T3 return

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

The trustee does not report the income on the trust's T3. All income, capital gains and capital losses from the trust property should be reported on the beneficial owner's tax return. Schedule 15 is filed with the T3 each year, even with no changes, though information previously reported can be carried forward.

A reportable bare trust that is also a listed trust is not required to file unless it is requested to file. The reporting provisions also do not require disclosure of information covered by solicitor-client privilege. Which of these applies depends on your situation, so it is worth confirming with a lawyer or accountant before the deadline.

Step 5: File on time and know what to do next

The T3 return is due no later than 90 days after the trust's tax year-end. For a December 31, 2026 year-end, that is March 31, 2027. If the T3 or Schedule 15 information is late and the trust has unpaid tax, the 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. If the trust has no unpaid tax on the due date, the alternative penalty is $25 a day, with a minimum of $100 and a maximum of $2,500, and a bare trust usually has no tax payable, so this is the likely one. Where a trust does have unpaid tax, a higher penalty of 10% of the unpaid tax plus 2% of that tax for each full month late, to a maximum of 20 months, may apply if CRA issued a demand to file and already assessed a late-filing penalty for any of the three preceding years.

• Confirm in writing whether the arrangement is a bare trust
• Check the exclusions that may apply
• Collect Schedule 15 details for every person involved
• Make sure the beneficial owner reports the income on their own return
• Diarize the filing date well before the deadline
• Speak with a lawyer or accountant if the facts are unclear

Frequently asked questions