2026 Bare Trust Reporting Rules in Canada: Who Must File a T3 by March 31, 2027?

QUICK ANSWER

Bare trust reporting is back for 2026, but the rules are narrower than the regime that caused widespread confusion in 2024. Under the legislation now in force, only certain bare trusts are brought into the enhanced trust-reporting regime, and several statutory exclusions can remove common family, principal-residence, partnership and institutional arrangements before the usual trust exemptions are even considered.

For a calendar-year bare trust that is reportable for 2026, the T3 Trust Income Tax and Information Return and Schedule 15 are generally due March 31, 2027. The difficult part is often not completing the forms. It is deciding whether a reportable bare trust exists in the first place and whether one of the new exclusions or exemptions applies.

This guide is current to September 24, 2026. CRA has stated that additional 2026 bare-trust guidance will be released before the filing season, so taxpayers and advisors should re-check the rules before filing.

WHAT CHANGED FOR 2026?

Canada’s bare-trust reporting rules have had an unusual history.

The enhanced trust-reporting regime first applied for taxation years ending after December 30, 2023. As the first filing deadline approached, it became clear that the rules could sweep in ordinary arrangements that many Canadians had never considered to be tax-reporting relationships: a parent on title to a child’s home, an adult child added to an elderly parent’s bank account, nominee corporations holding real estate, and other arrangements where legal title and beneficial ownership were separated.

On March 28, 2024, CRA announced administrative relief for bare trusts for the 2023 taxation year unless CRA specifically requested a return. Bare trusts were then removed from the reporting regime for taxation years ending in 2024 and 2025.

Bill C-15, the Budget Implementation Act, 2025, No. 1 (S.C. 2026, c. 3), received Royal Assent on March 26, 2026. The new legislation brings certain bare trusts back into the reporting regime for taxation years ending after December 30, 2026, but with a substantially more targeted definition and several specific exclusions.

That means taxpayers should not rely on the 2024 postponement or assume another last-minute waiver will occur. The current law contemplates 2026 reporting, and CRA is openly telling trustees and tax professionals to prepare for it.

For most bare trusts, which generally use a calendar year, the first filing date under the revised regime will be March 31, 2027.

WHAT IS A BARE TRUST FOR THE 2026 REPORTING RULES?

The starting point is legal ownership versus beneficial ownership.

A person can appear on legal title to property without owning the economic benefits of that property. A nominee corporation may hold registered title to a commercial building for another corporation. A parent may be added to title to help an adult child obtain mortgage financing. An adult child may be made a joint legal holder of an elderly parent’s bank account solely for convenience.

Those arrangements can separate legal ownership from beneficial ownership.

But one of the most important changes for 2026 is that not every informal nominee or agency arrangement is automatically a reportable bare trust.

New subsection 150(1.3) of the Income Tax Act focuses on an express trust that would otherwise be excluded from the ordinary trust rules where:

• one or more persons have legal ownership of property held for the use or benefit of one or more persons or partnerships; and
• the legal owner can reasonably be considered to act as agent for the persons or partnerships who have the use or benefit of the property.

CRA describes a bare trustee, in general terms, as a trustee with no significant independent powers or responsibilities whose function is essentially to hold legal title and act on the beneficiary’s instructions.

The reference to an “express trust” matters. Finance Canada’s explanatory notes say the revised rule is intended to capture arrangements that would normally constitute bare trusts provided they are also express trusts under the applicable private law. Whether a particular arrangement is legally a trust remains a question of fact and law.

This is why a title search, bank statement or tax return may not answer the question by itself. You need to understand why legal title was structured as it was, who actually enjoys the property, who funded it, who controls it, what the parties intended and what the applicable provincial private law says about the arrangement.

THE TWO-GATE TEST FOR 2026

For most clients, the cleanest way to approach the new regime is as a two-gate analysis.

GATE 1 — IS THIS A REPORTABLE BARE TRUST UNDER SUBSECTIONS 150(1.3) AND 150(1.31)?

First determine whether the arrangement falls within subsection 150(1.3): an express trust involving a separation of legal ownership and use or benefit, with the legal owner acting as agent.

Then test the specific exclusions in subsection 150(1.31). If one applies, subsection 150(1.3) does not bring the arrangement into the bare-trust reporting regime for that year.

GATE 2 — IF IT IS WITHIN THE REGIME, DOES A GENERAL “LISTED TRUST” EXCEPTION IN SUBSECTION 150(1.2) APPLY?

Even where the arrangement survives Gate 1, it may still fall within one of the broader exclusions available to trusts generally. The most practically important are the less-than-three-month rule, the $50,000 fair-market-value rule, and the more conditional $250,000 rule for certain related individuals and qualifying assets.

This sequence matters. A common mistake is to jump straight to the $50,000 or $250,000 thresholds without first asking whether the arrangement is even a reportable bare trust under the revised legislation.

GATE 1: THE NEW BARE-TRUST-SPECIFIC EXCLUSIONS

1. THE LEGAL OWNERS AND BENEFICIAL OWNERS MATCH

An exclusion applies where every person or partnership treated as a beneficiary is also a legal owner of the property, and there are no legal owners who are not beneficiaries.

Finance Canada explains that this is intended to provide certainty for arrangements such as family members holding a joint bank account where the legal and beneficial interests align.

This is important, but it does not mean every joint account is excluded. If an adult child is added as a joint legal holder of a parent’s account but has no beneficial entitlement to the money, the sets of legal and beneficial owners may not match. That arrangement requires further analysis.

2. CERTAIN RELATED-PERSON PRINCIPAL-RESIDENCE ARRANGEMENTS

Another exclusion applies where the legal owners are related individuals and the real property would be the principal residence of one or more of those legal owners for the year if designated.

Finance Canada specifically states that the provision is intended to exclude circumstances such as a parent being added to title so a child can obtain a mortgage.

This is welcome relief, but it should not be converted into the oversimplified rule that “parent on title means no bare-trust filing.” The statutory conditions still need to be tested. For example, who is actually on legal title matters, whether the legal owners are related matters, and the principal-residence condition matters.

3. CERTAIN SPOUSAL PRINCIPAL-RESIDENCE ARRANGEMENTS

A separate exclusion applies where an individual legal owner holds real property for the use or benefit of the legal owner’s spouse or common-law partner and the property could be the legal owner’s principal residence for the year if designated.

Finance Canada says this is intended to deal with situations such as spouses jointly occupying a family home while only one spouse is on title.

4. CERTAIN PARTNERSHIP ARRANGEMENTS

An exclusion is available where property is held throughout the year solely for a partnership, every legal owner is a partner of that partnership, and the partnership information-return condition is met.

This is significant for real estate partnerships. It is also easy to overstate.

If title is held by a nominee corporation that is not itself a partner, the statutory partnership exclusion may not apply. A real estate group cannot simply assume that “the property belongs to a partnership” ends the analysis.

5. PROPERTY HELD UNDER A COURT ORDER

Property held by the legal owner as required by a court order falls within a specific exclusion.

6. CERTAIN RESOURCE-PROPERTY AND GOVERNMENT-FUNDED NON-PROFIT ARRANGEMENTS

The legislation also contains targeted exclusions involving certain Canadian resource property structures and certain government-funded non-profit arrangements.

7. CERTAIN REGISTERED SECURITIES DEALER AND TRUST-COMPANY ARRANGEMENTS

The enacted version also includes relief for certain arrangements where a registered securities dealer or regulated trust company acts in the specified capacity, provided the statutory asset and information-reporting conditions are met.

For most private clients, these last categories will be less common, but they reinforce the central point: the 2026 regime is more targeted than the original bare-trust reporting rules.

GATE 2: THE GENERAL TRUST EXCEPTIONS THAT CAN STILL REMOVE A FILING

THREE-MONTH EXCEPTION

A trust that had been in existence for less than three months during the year can fall within the listed-trust exception.

This can matter for short-lived nominee arrangements, transaction holdbacks and arrangements created late in the year.

Do not assume that an arrangement created in the final quarter automatically qualifies. The actual creation date and period of existence must be established.

THE $50,000 FAIR-MARKET-VALUE EXCEPTION

A trust that holds assets with a total fair market value not exceeding $50,000 throughout the year can fall within the exception.

Two details are easy to miss.

First, the test is not merely the December 31 balance. It applies throughout the year.

Second, the $50,000 threshold is based on the property held by the trust. It is not based on the economic value of the bare trustee’s own interest, which may be nil.

Under the revised legislation, the $50,000 exception is no longer restricted to a prescribed list of asset types. (Under the previous version, this exception applied only where the trust held money, certain government debt and listed securities; that asset-type restriction has been removed for the years now in issue.) Unlike the more restrictive $250,000 rule discussed below, the $50,000 rule now applies regardless of asset type.

THE $250,000 RELATED-PERSON / QUALIFYING-ASSET EXCEPTION

There is also a broader $250,000 exception, but it has significantly more conditions.

In general terms:

• each trustee must be an individual;
• each beneficiary must be an individual who is related to each trustee, with limited relief allowing a graduated rate estate of an individual to be a beneficiary where that individual was a beneficiary immediately before death;
• the total fair market value of the property must not exceed $250,000 throughout the year; and
• the trust may hold only specified qualifying types of property.

The qualifying-property list includes, among other things, money, deposits at a Canadian bank, trust company or credit union, qualifying GICs (including a GIC issued by a credit union), certain government and public debt, listed securities, mutual fund corporation shares, mutual fund trust units, certain segregated-fund interests, certain listed trust interests, personal-use property, certain related rights to income or gains, and certain exempt Canadian life insurance policies.

The list matters because one non-qualifying asset can prevent reliance on this particular exception.

Private-company shares, private debt, investment real estate that is not personal-use property, cryptoassets and other property not appearing on the statutory list need particular attention.

WHO COUNTS AS “RELATED” FOR THESE RULES?

For section 150, the Act expands the related-person concept to include an aunt, uncle, niece and nephew, and also provides that a person is related to himself or herself.

A cousin is not added to that expanded list.

COMMON 2026 BARE-TRUST SITUATIONS

The table below is a screening tool, not a legal conclusion.

PARENT ON TITLE TO A CHILD’S HOME

This may become the highest-volume consumer question for the 2026 rules.

Consider the common mortgage situation: an adult child buys a home, but a lender requires a parent to be added to legal title. The child funds the home, occupies it and is intended to be the beneficial owner. The parent is on title for financing reasons.

The revised legislation provides targeted relief. Finance Canada expressly says the related-person principal-residence exception is intended to exclude circumstances such as a parent being on title so a child can obtain a mortgage.

That is helpful, but the statutory conditions still govern. A different result may follow where the parent is the only registered owner, where the beneficial owner is not also a legal owner, where the property cannot meet the relevant principal-residence condition, or where the parties’ actual arrangement differs from the assumed mortgage-co-signing facts.

Companion article: Parent on Title to a Child’s Home: Do the 2026 Bare Trust Rules Require a T3?

JOINT BANK ACCOUNTS WITH ELDERLY PARENTS

Another common arrangement involves an elderly parent adding an adult child to a bank or investment account.

There are at least three legally different situations that clients often describe with the same words: “My child is on my account.”

The child may be merely an authorized signer, acting under a power of attorney, or a joint legal account holder. Those are not the same.

If the child has authority to transact but does not acquire legal ownership, the arrangement may simply be agency rather than a trust.

If the child becomes a joint legal owner but the parent remains the sole beneficial owner, a bare-trust analysis can arise. The specific subsection 150(1.31)(a) exclusion for matching legal and beneficial owners may not fit because there is a legal owner who is not beneficially entitled.

However, the arrangement may still escape reporting under the $50,000 or $250,000 listed-trust exceptions, depending on the maximum value, relationship and asset composition.

Companion article: Joint Bank Accounts with Elderly Parents: Do the 2026 Bare Trust Rules Require a T3?

CORPORATE NOMINEES AND REAL ESTATE GROUPS

Commercial nominee arrangements remain one of the areas most likely to generate actual 2026 filings.

A corporation may hold registered title to real estate while another corporation, partnership or investor is the beneficial owner. Where there is a written nominee or declaration-of-trust agreement, the express-trust element may be relatively clear.

But the individual-focused exclusions often do not help:

• the $250,000 listed-trust exception requires each trustee to be an individual;
• the principal-residence exclusions are aimed at individual/family real estate;
• investment real estate frequently exceeds $50,000;
• the partnership-specific exclusion has its own requirements, including that each legal owner be a partner.

A non-partner nominee corporation holding a valuable property for a partnership may therefore require reporting even though the partnership itself files a T5013.

Companion article: Corporate Nominee Real Estate Bare Trusts: 2026 T3 Reporting for Canadian Real Estate Groups

WHAT ABOUT IN-TRUST ACCOUNTS FOR CHILDREN?

Do not assume every “in-trust for” account is a bare trust.

Where a parent or other adult actually manages property for a minor and has substantive investment or administrative duties, the arrangement may be an ordinary substantive trust rather than a bare trust.

That distinction can produce a different filing history, different income-attribution questions and different compliance issues.

WHAT ABOUT POWERS OF ATTORNEY?

A power of attorney, by itself, does not normally transfer legal ownership of the property to the attorney. The attorney acts on behalf of the property owner.

That is conceptually different from a bare trust, where legal ownership and beneficial ownership are divided.

WHAT HAS TO BE FILED IF A BARE TRUST IS REPORTABLE?

CRA’s current guidance says that a reportable bare trust files a T3 Trust Income Tax and Information Return together with Schedule 15, Beneficial Ownership Information of a Trust.

A trust account number is required. It can be obtained through CRA’s online Trust Account Registration service or by filing Form T3APP.

CRA currently instructs filers to identify the trust using trust code 307 for a bare trust.

Schedule 15 generally requires information about trustees, settlors, beneficiaries and controlling persons, including identifying information such as name, address, date of birth for an individual, country of residence and a tax identification number.

The beneficial owner—not the bare trust—continues to report the income, capital gains and capital losses from the trust property on the beneficial owner’s tax return.

WHAT IS THE FILING DEADLINE?

A T3 return is generally due within 90 days after the end of the trust’s taxation year.

For a reportable bare trust with a December 31, 2026 year-end, the filing deadline is March 31, 2027.

The practical deadline for deciding whether a filing is required is earlier. Waiting until March to identify nominee corporations, joint family accounts or family members on title leaves little time to determine whether a trust legally exists, identify the correct exception, register for a trust number if required and collect Schedule 15 information.

WHAT ARE THE PENALTIES?

Where there is no unpaid tax, the ordinary late-filing penalty for a trust return is imposed under subsection 162(7) of the Income Tax Act and, as CRA describes it, is $25 per day, with a minimum of $100 and a maximum of $2,500.

The more serious exposure arises where a person or partnership knowingly, or in circumstances amounting to gross negligence, makes or participates in a false statement or omission on a required trust return or fails to file the return.

Under subsections 163(5) and (6), the penalty is the greater of:

• $2,500; and
• 5% of the highest total fair market value of all property held by the trust at any time in the year.

For a valuable real estate nominee arrangement, that can be substantial.

We would not assume that making a “good-faith attempt” automatically eliminates penalties. Penalty relief and the gross-negligence standard are fact-specific.

A PRACTICAL 2026 SCREENING PROCESS

STEP 1 — IDENTIFY ARRANGEMENTS WHERE LEGAL TITLE AND BENEFICIAL OWNERSHIP MAY DIFFER

Ask specific questions:

• Is anyone on title to real estate but not intended to own the economic interest?
• Are you on title to property for a child, parent, sibling, corporation or partnership?
• Is anyone jointly named on a bank or investment account only for convenience?
• Does a corporation hold legal title to real estate, vehicles, investments or other assets beneficially owned by another entity?
• Does a partner or nominee hold property for a partnership?
• Are there written nominee, agency or declaration-of-trust agreements?
• Are there escrow or holdback arrangements that continued for several months?

STEP 2 — DETERMINE WHETHER AN EXPRESS BARE TRUST ACTUALLY EXISTS

Review the parties’ intention, legal ownership, beneficial entitlement, powers and responsibilities of the legal owner, and the applicable private law.

STEP 3 — APPLY THE SPECIFIC SUBSECTION 150(1.31) EXCLUSIONS

STEP 4 — APPLY THE GENERAL SUBSECTION 150(1.2) EXCEPTIONS

STEP 5 — DOCUMENT THE CONCLUSION

Even where no return is required, keep a short file record showing the arrangement reviewed, relevant facts, statutory exclusion or exception relied upon, and supporting value or ownership information.

STEP 6 — IF REPORTING IS REQUIRED, REGISTER AND COLLECT SCHEDULE 15 INFORMATION EARLY

2026 BARE TRUST FAQS

DO ALL BARE TRUSTS HAVE TO FILE FOR 2026?

No. The 2026 rules apply only to certain reportable bare trusts, and there are multiple bare-trust-specific exclusions and general trust exceptions.

WHEN IS THE 2026 BARE TRUST RETURN DUE?

For a calendar-year bare trust with a December 31, 2026 year-end, the general 90-day deadline is March 31, 2027.

DOES A PARENT ON TITLE TO A CHILD’S HOME HAVE TO FILE?

Not necessarily. The legislation contains a specific related-person principal-residence exclusion, and Finance Canada says it is intended to cover situations such as a parent being on title so a child can obtain a mortgage. The statutory conditions still need to be met.

DOES A JOINT BANK ACCOUNT WITH AN ELDERLY PARENT CREATE A BARE TRUST?

It can, but not every joint account is a bare trust. Determine whether the additional holder has legal ownership, beneficial ownership or merely signing authority. If there is a bare trust, an exclusion or value-based exception may still remove the filing obligation.

IS A POWER OF ATTORNEY A BARE TRUST?

A power of attorney alone generally creates an agency relationship and does not itself transfer legal ownership to the attorney.

WHAT IS THE $50,000 BARE TRUST EXEMPTION?

A trust can fall within a listed-trust exception if total fair market value does not exceed $50,000 throughout the year. It is not merely a year-end test, and under the revised rules it is no longer limited to particular asset types.

WHAT IS THE $250,000 BARE TRUST EXEMPTION?

It is conditional. Among other requirements, each trustee must be an individual, each beneficiary must be an individual related to each trustee (with limited graduated-rate-estate relief), property must not exceed $250,000 throughout the year, and only qualifying asset types may be held.

DOES REAL ESTATE QUALIFY FOR THE $250,000 EXEMPTION?

Personal-use property can be a qualifying asset. Investment real estate is not automatically qualifying personal-use property. Real estate should also be tested under the specific principal-residence exclusions where relevant.

CAN A CORPORATE BARE TRUSTEE USE THE $250,000 EXCEPTION?

Generally not under paragraph 150(1.2)(b.1), because that provision requires each trustee to be an individual. Other exclusions may still apply.

DO PARTNERSHIP NOMINEE ARRANGEMENTS HAVE TO FILE?

Not always. A specific exclusion can apply where property is held solely for a partnership, every legal owner is a partner and the partnership information-return condition is met. A non-partner nominee corporation may not qualify.

DO I NEED A TRUST NUMBER?

Yes, if a T3 must be filed. CRA provides online Trust Account Registration and Form T3APP.

WHAT IS BARE TRUST CODE 307?

CRA uses trust code 307 to identify a bare trust in the T3 system.

WHAT DOES SCHEDULE 15 REPORT?

It generally identifies trustees, settlors, beneficiaries and controlling persons and requires specified identifying information.

DOES THE BARE TRUST PAY TAX ON THE PROPERTY INCOME?

Normally the beneficial owner continues to report the income, capital gains and capital losses. The T3/Schedule 15 requirement is primarily information reporting.

WHAT IF WE FILED A BARE TRUST T3 FOR 2023?

Confirm whether the same arrangement still exists and whether CRA’s existing trust account number remains available. Re-test the arrangement under the new 2026 legislation because the scope and exceptions have changed.

WHAT IF CRA RELEASES MORE GUIDANCE?

CRA says more information will be added before the 2026 T3 filing season. This guide should be refreshed when that occurs.

SHOULD I FILE “JUST TO BE SAFE”?

Not automatically. The better approach is to determine whether the arrangement is within the regime, apply the statutory exclusions and exceptions, document the conclusion, and file where required.

WHEN SHOULD I HAVE MY ARRANGEMENTS REVIEWED?

Ideally before the end of 2026.

WORK WITH LEPORE & COMPANY

Lepore & Company provides 2026 Bare Trust Review and T3/Schedule 15 Filing services for individuals, owner-managed businesses, real estate groups and other taxpayers who need to determine whether the new reporting rules apply.

A bare trust review is not simply a form-preparation exercise. The first question is whether the legal and beneficial ownership arrangement falls within the 2026 rules. The next is whether one of the statutory exclusions or exemptions removes the filing obligation.

If you have a family member on title to real estate, a joint bank or investment account established for convenience, a corporate nominee holding property for another entity, or another arrangement where legal and beneficial ownership may differ, it is worth reviewing the position before the March 31, 2027 filing deadline.

UPDATE NOTE

This article reflects legislation and CRA guidance available as of September 24, 2026. CRA has indicated that further guidance will be released before the filing season for trusts with taxation years ending December 31, 2026.

DISCLAIMER

This article provides general information only and does not constitute legal, tax or accounting advice. Whether a trust or bare trust exists is a question of fact and law under the applicable private law, and the reporting result can change with small differences in ownership, intention, property type, value and relationships.