New Trust Reporting Rules for Express Trusts in Canada

Under the enhanced reporting rules, a resident express trust that is not exempt must file a T3, and Schedule 15 asks for information on the trustees, settlors, beneficiaries and controlling persons. Whether your trust has to file depends on its facts.

This article explains who must file, who is exempt, what has changed, and what happens if you miss a deadline. Check the current wording before filing, as the details can depend on your trust.

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

Express trusts and bare trusts

In a regular, or express, trust, the trustee holds and manages property under a trust document with real powers and duties, and the trust files its own T3. In a bare trust the trustee is only an agent with legal title. Resident express trusts that are not listed trusts must file a T3.

Section 150(1.3) widens the idea for reporting purposes. An express trust includes an arrangement where a legal owner holds property for others and can reasonably be considered to act as their agent. Bill C-15 received royal assent on March 26, 2026 and contains the amended s. 150(1.2) and the new s. 150(1.3) and (1.31).

Who must file a T3

Under s. 150(1.2), a resident express trust must file a T3 unless a listed condition applies. These include existing less than three months and holding assets with a total fair market value not exceeding $50,000 throughout the year. Other exemptions cover registered charities, mutual fund trusts, graduated rate estates and certain registered plans.

There is also an exemption in s. 150(1.2)(b.1) where all of the following are true:

• Every trustee is an individual.
• Every beneficiary is an individual related to each trustee, or a graduated rate estate of one.
• Total fair market value is at most $250,000 at all times.
• Assets are only listed low-risk types such as cash, GICs, listed securities and mutual funds.

For 2024 and 2025 year-ends, CRA describes listed trusts as including trusts that existed less than three months and trusts holding $50,000 or less in assets. Certain individual-trustee trusts holding up to $250,000 in qualifying assets are also listed. For years ending on or after December 31, 2025, graduated rate estates and employee ownership trusts are added.

What has changed

For a reportable bare trust, income, capital gains and capital losses should be reported on the beneficial owner's tax return. Some arrangements are excluded from the deemed-trust rule, but only when specific conditions are met. One exclusion applies where every beneficiary is also a legal owner and no legal owner is a non-beneficiary, as in CRA's example of a joint bank account held by family members for the use and benefit of each of them. Another applies where the legal owners are related individuals and the property is real property that would be the principal residence of one or more of them, which CRA says covers a parent on title to allow a child to obtain a mortgage.

Deadlines and penalties

The T3 return and any balance owing are due no later than 90 days after the trust's tax year-end. If the date falls on a weekend or CRA-recognized holiday, the next business day applies. Most trusts have a December 31 year-end, although a graduated rate estate can use a non-calendar year-end for up to 36 months after death.

If the T3 or Schedule 15 information is late, 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 CRA issued a demand to file and already assessed a late-filing penalty for any of the three preceding years, the penalty may be 10% plus 2% a month, to a maximum of 20 months. If there is no unpaid tax, the alternative penalty is $25 a day, with a minimum of $100 and a maximum of $2,500.

Knowingly or grossly negligently making a false statement or omission, or failing to file, for a non-listed trust can bring a penalty of the greater of $2,500 and 5% of the highest fair market value of the trust property.

What to do next

• Identify the trust's year-end and calculate the 90-day due date.
• Check whether any exemption under s. 150(1.2) fits.
• Gather details on trustees, settlors, beneficiaries and controlling persons.
• Review any informal arrangements where someone holds property for another, as these may be bare trusts.
• Get advice from a lawyer or accountant if you are unsure whether a trust exists, as it is a question of fact.

Frequently asked questions