- A resident express trust must generally file a T3 unless a listed condition applies, and holding assets worth no more than $50,000 throughout the year is one of them.
- The $50,000 test is about total fair market value throughout the year, and a separate exception exists for certain family trusts holding up to $250,000 in listed low-risk assets.
- Bare trusts are a separate question: CRA does not expect them to file for taxation years ending in 2025, but reportable bare trusts are caught for years ending on or after December 31, 2026.
If you act as trustee for a small trust, you may have heard that trusts with modest assets do not have to file a T3 return. That is partly true, but the exemption has conditions, and it does not cover every kind of arrangement.
This article explains the $50,000 threshold, the other main exceptions, and how all of this interacts with the rules on bare trusts. Whether a particular trust qualifies depends on its facts, so use this as a map and confirm the details with a lawyer or accountant.
This article covers Canadian federal tax law, which applies in every province.
The general rule and the $50,000 exception
A resident express trust must file a T3 unless a listed condition applies. An express trust is a regular trust where the trustee holds and manages property under a trust document, with real powers and duties.
One listed condition is that the trust holds assets with a total fair market value not exceeding $50,000 throughout the year. Another is that the trust has existed for less than three months. The word "throughout" matters: the value has to stay within the limit for the whole year, not just at year-end.
Other trusts that may not need to file
The $50,000 test is not the only way out. The Income Tax Act also exempts registered charities, mutual fund trusts, graduated rate estates and certain registered plans.
A further exception covers certain family trusts. Every trustee must be an individual, every beneficiary must be an individual related to each trustee (or a graduated rate estate of one), the total fair market value must be at most $250,000 at all times, and the assets must be only listed low-risk types such as cash, GICs, listed securities and mutual funds.
- Trust existed less than three months
- Assets worth $50,000 or less throughout the year
- Family trust with individual trustees and related individual beneficiaries, up to $250,000 in listed low-risk assets
- Registered charities, mutual fund trusts, graduated rate estates and certain registered plans
Listed trusts for 2024 and 2025
For 2024 and 2025 year-ends, listed trusts include 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.
Being listed matters beyond the T3 itself. For example, a reportable bare trust that is also a listed trust is not required to file unless it is requested to file.
How bare trusts fit in
A bare trust is an arrangement where the trustee acts as an agent, holding only legal title, while the beneficiary is the beneficial owner. For reporting, a reportable bare trust is treated as an express trust, so the listed conditions in s. 150(1.2), including the $50,000 asset test, can matter once the trust reporting rules apply to it.
For taxation years ending in 2025, the CRA does not expect bare trusts to file a T3 return, including Schedule 15. Bare trusts are not subject to the trust reporting rules for taxation years ending on or after December 31, 2024 and before December 31, 2026. Reportable bare trusts are subject to those rules for taxation years ending on or after December 31, 2026.
Some arrangements are excluded even from the new bare trust rules, such as a joint bank account held by family members for the use and benefit of each of them, or a parent on title so a child can get a mortgage on a principal residence. Whether a bare trust exists at all is a question of fact, and CRA suggests consulting a legal advisor if you are unsure.
What to do next
- Confirm whether your arrangement is an express trust or a bare trust.
- Work out the total fair market value of the trust assets throughout the year, not only at year-end.
- Keep records showing why you concluded no filing was needed.
- If the trust holds a home or a joint account, ask a lawyer or accountant how the bare trust exclusions apply.
Frequently asked questions
Does a trust with $50,000 or less in assets never have to file a T3?
Not automatically. The exemption applies where the assets have a total fair market value not exceeding $50,000 throughout the year. If the value goes above that at any point, the exemption may not apply, so track the value carefully.
Is there a higher limit for family trusts?
There is a separate exception with a limit of $250,000. It requires individual trustees, related individual beneficiaries and only listed low-risk assets such as cash, GICs, listed securities and mutual funds.
Does a bare trust need to file a T3 for 2025?
For taxation years ending in 2025, the CRA does not expect bare trusts to file a T3 return or Schedule 15. This is not a permanent exemption, because reportable bare trusts are caught for years ending on or after December 31, 2026.
Who decides whether I have a bare trust?
It is a question of fact. CRA says it cannot give legal advice or definitive determinations on whether a trust exists, and it suggests consulting a legal advisor if you are unsure.
Sources
- CRA – T3 Trust Guide 2025 — canada.ca
- CRA – Important updates to the trust reporting requirements for the 2025 taxation year — canada.ca
- CRA – Enhanced reporting rules for trusts and bare trusts: FAQ — canada.ca
- Justice Laws – Income Tax Act s. 150 — Justice Laws (federal)
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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