Bare trust reporting requirements will apply for the 2026 taxation year. The requirement was first announced in 2018 and legislated in 2022, however the CRA postponed the filing obligation for the 2023, 2024, and 2025 taxation years, and does not require a bare trust return to be filed for these years in most circumstances.
The CRA's stated objectives are to improve transparency, combat crime, and money laundering, identify foreign ownership, and help ensure that taxes are appropriately paid.
What Is a Bare Trust?
A bare trust generally exists where one person holds legal title to property but has no active duties, discretion, or control over the property. Another person is the true (beneficial) owner and has the right to the income and capital from the property and can direct the legal owner to transfer title to them. In these circumstances, the legal owner acts solely as a nominee for the beneficial owner.
Common Situations to Consider
Please review the situations outlined in the Bare Trust Identification Sheet and let us know whether any apply to you, a family member, or an entity you control
Penalties for Failing to File
Failure to file a required return may result in a penalty of $25 per day, subject to a minimum of $100 and a maximum of $2,500. Where the failure is made knowingly or due to gross negligence, the penalty is the greater of $2,500 and 5% of the fair market value of the property held in the trust. These penalties are assessed against the trustees who are the legal owners of the property.
Next Steps
To allow sufficient time to prepare and file the required 2026 return before the March 31, 2027, deadline, please advise us at your earliest convenience if you believe a bare trust arrangement applies to you. If you filed a T3 for a bare trust in a prior year, please let us know.