Few corners of Canadian tax law have generated as much confusion in recent years as the rules governing bare trusts. Millions of ordinary Canadians unknowingly hold property through arrangements that may qualify as bare trusts, and the expanded trust reporting regime under the Income Tax Act appeared, on its face, to sweep all of them into a brand-new annual filing obligation. The reality has been far messier. The filing requirement for bare trusts was deferred not once but three times, and the rules that finally govern it were only enacted in 2026 — meaning bare trusts now face a real filing obligation, in a narrowed form, for the first time.

This article explains what a bare trust actually is, walks through the expanded reporting rules and the Schedule 15 beneficial-ownership regime, and — most importantly — sets out the current status of the bare-trust filing requirement as of mid-2026, so you do not waste effort filing a return that was not required for earlier years, or assume the obligation has disappeared when it has now arrived for taxation years ending on or after December 31, 2026.

What is a bare trust?

A bare trust is one of the simplest arrangements in trust law, and that simplicity is precisely what makes it so easy to create without realizing it. In a bare trust, one person holds legal title to property while another person holds the beneficial ownership — meaning the right to use the property, the income it produces, and its eventual proceeds. The legal owner (often called a nominee or bare trustee) has no independent discretion. They simply hold title and must deal with the property entirely as the beneficial owner directs.

The distinction between legal and beneficial ownership is the heart of the matter. The person on title is not necessarily the person who truly owns the asset for tax and economic purposes. A bare trust changes nothing about who reports the income or who is taxed on a sale — the beneficial owner remains responsible for that. What the expanded rules introduced was a separate information reporting obligation on top of that ordinary treatment.

Bare trusts arise constantly in everyday Canadian life, usually for entirely innocent reasons. Common examples include:

A parent added to a child's mortgage or title. A parent goes on title to a home to help an adult child qualify for financing, even though the child provides the down payment, makes the payments, and lives in the property. The parent holds legal title; the child holds the beneficial interest.
Joint accounts opened for estate convenience. An aging parent adds an adult child as a joint holder on a bank or investment account to help manage finances and avoid probate, while the parent remains the true owner of the funds.
A nominee corporation holding real estate. Commercial property is frequently held by a numbered company that holds title in name only, with the real owners holding the beneficial interest behind the scenes for liability, privacy, or financing reasons.
An in-trust-for (ITF) account for a minor. A relative holds an investment account in trust for a child's benefit.

None of these arrangements is exotic or aggressive. That is exactly why requiring all of them to file annual trust returns triggered such alarm — and why the government repeatedly stepped back before settling on a narrowed regime.

The expanded trust reporting rules and Schedule 15

The expanded reporting regime stems from amendments to the trust reporting provisions of the Income Tax Act (the rules built around section 150 and the trust filing requirements). Before these changes, many trusts that had no tax payable and no activity were not required to file a T3 Trust Income Tax and Information Return at all. The amendments dramatically broadened the filing net, requiring most trusts — including those with no income — to file annually and, critically, to disclose the people behind them.

That disclosure happens on Schedule 15, Beneficial Ownership Information of a Trust. Where it applies, Schedule 15 requires the trust to identify every person who is a settlor, trustee, beneficiary, or controlling person (a person who has the ability to exert control or override decisions over the trust's income or capital), and to report for each of them:

Name and address;
Date of birth (for individuals);
Country of residence; and
Tax identification number (such as a social insurance number, business number, or trust account number).

The policy goal is transparency: giving the Canada Revenue Agency (CRA) a clearer view of who ultimately owns and benefits from assets held through trust structures, consistent with broader international beneficial-ownership initiatives. For a bare trust, this is a significant ask, because the whole point of many such arrangements is administrative convenience — the parties never thought of themselves as running a "trust" at all.

The repeated deferrals: where things actually stand in 2026

This is the part that matters most, and where information circulating online is frequently out of date. The bare-trust filing requirement was deferred three separate times for the 2023, 2024, and 2025 tax years, and the governing rules have now been enacted for taxation years ending on or after December 31, 2026. Here is the timeline:

2023 tax year — exempted. Just days before the original filing deadline in spring 2024, the CRA announced that bare trusts would not be required to file a T3 return or Schedule 15 for the 2023 tax year, citing the unexpected breadth and complexity of the new rules.
2024 tax year — exempted. The CRA again confirmed, well ahead of the deadline, that bare trusts would not be required to file a T3 return, including Schedule 15, for the 2024 tax year. This deferral was paired with proposed legislative changes intended to narrow and clarify which arrangements would ultimately be caught.
2025 tax year — exempted. On December 16, 2025, the CRA confirmed that it does not expect bare trusts to file a T3 return, including Schedule 15, for the 2025 tax year either. In the same communication, the CRA indicated that mandatory bare-trust filing was intended to begin for taxation years ending on or after December 31, 2026.
2026 tax year — filing arrives (in narrowed form). The reason for the third deferral was that the rules meant to govern bare-trust reporting going forward had not yet been passed into law. Revised draft legislation was released in August 2024 and amended again in August 2025, and the federal government confirmed in its November 2025 budget its intention to proceed. That legislation — Bill C-15, the Budget Implementation Act — received royal assent on March 26, 2026. It amends what counts as a bare trust for reporting purposes and requires certain bare trusts to file for taxation years ending on or after December 31, 2026. It is now final law.

The practical takeaway: for the 2023, 2024, and 2025 tax years, a bare trust generally did not need to file a T3 return or Schedule 15. With Bill C-15 now enacted, the obligation applies for taxation years ending on or after December 31, 2026 — which for a calendar-year bare trust means a return generally due in early 2027 — subject to the exemptions described below. You should not assume you had to file for 2025, and you should not assume the requirement has been cancelled — it has now arrived, in a narrowed form, for the 2026 year. Because the details turn on the enacted rules and the available exemptions, confirm your specific position before the relevant deadline.

What the 2026 rules require — and exempt

The enacted rules are meaningfully narrower than the original regime that caused the 2024 panic. Bill C-15 carves out a long list of common, low-risk bare-trust arrangements so that ordinary families are not pulled into annual filing. Under the enacted rules, a bare trust is generally exempt from filing a T3 return for taxation years ending on or after December 31, 2026 where, among other situations:

All beneficiaries are also legal owners, and all legal owners are also beneficiaries. In other words, there is no person on title who is not also a beneficial owner, and vice versa. This exemption is aimed at simple co-ownership arrangements.
Related individuals and a principal residence. The legal owners are related to one another (the rules extend the relevant family relationships to include, for example, aunts and uncles and nieces and nephews) and the property is real or immovable property that could be designated a principal residence of at least one of them — capturing, for example, a parent on title to help a child.
A spouse or common-law partner and a principal residence. A related exemption applies where an individual holds real or immovable property for the use or benefit of their spouse or common-law partner and the property could be designated as the owner's principal residence.
Short-lived arrangements. Bare trusts that exist for less than three months in the year.

There is also relief from completing Schedule 15 in particular for smaller trusts — broadly, where the trust holds property with a total fair market value of $50,000 or less throughout the year (limited to money, certain government debt obligations, and listed securities), or holds only specified low-risk assets under $250,000 where further conditions, including related-individual beneficiaries, are met. These tests are technical and should be confirmed for any given trust.

The intent of these carve-outs is clear: the vast majority of garden-variety bare trusts — the parent helping with a mortgage, the modest joint account opened for convenience — are expected to fall within an exemption even now that filing has become mandatory. The arrangements most likely to require filing are larger, more complex structures, such as nominee corporations holding substantial real estate where title and beneficial ownership diverge.

Penalties for non-filing — when the requirement is in force

The penalties below did not apply to bare trusts for the exempted 2023, 2024, and 2025 years. But with filing now mandatory for taxation years ending on or after December 31, 2026, it is essential to understand the stakes, because they are steep.

The ordinary late-filing penalty for a trust return is $25 for each day the return is late, with a minimum of $100 and a maximum of $2,500. On top of that, the rules carry a much harsher gross negligence penalty for failing to file knowingly or in circumstances amounting to gross negligence: the greater of $2,500 and 5% of the highest fair market value of all property held by the trust at any time in the year. For a bare trust holding a $1 million property, that 5% penalty would be $50,000 — a striking amount for an information return on an arrangement that owes no tax.

It was precisely this combination — sweeping scope, modest-looking arrangements, and a percentage-of-value penalty — that made the original rollout so contentious and prompted the deferrals. Now that the requirement is in force, the exemptions are intended to keep most families out of penalty exposure, but those who fall outside an exemption and fail to file could face significant consequences.

Practical planning now that filing has arrived

With the requirement now in force for taxation years ending on or after December 31, 2026, bare trusts can no longer be left unexamined. Several practical steps make sense now:

Identify your bare trust arrangements. Review titles, joint accounts, and any property held in someone else's name for your benefit (or that you hold for someone else). Knowing where these arrangements exist is the foundation for compliance.
Document the beneficial ownership. Where legal and beneficial ownership diverge, a clear written record — for example, a declaration of bare trust or nominee agreement — helps establish who truly owns the asset. This matters for income tax and capital gains on a future sale, entirely apart from Schedule 15.
Gather the Schedule 15 data points. If you expect to fall outside the exemptions, start collecting names, addresses, dates of birth, residency, and tax identification numbers for the relevant parties, so you are not scrambling at the deadline (generally 90 days after the trust's year-end).
Coordinate with estate and tax planning. Bare trusts often sit alongside broader planning, interacting with strategies such as family trust tax planning, holding-company structures, and post-mortem planning.
Confirm whether each arrangement is caught. Apply the enacted exemptions to your specific facts before the relevant year-end rather than relying on a memory of the rules.

If you are an accountant advising clients through this transition, our resources for accountants may be useful, and where a CRA position needs to be challenged, audit representation and matters proceeding to the Tax Court of Canada are areas where professional guidance matters.

The bottom line

Bare trusts are common, often unintentional, and have been at the centre of a confusing compliance story in recent Canadian tax history. As of mid-2026, the key facts are: bare trusts were exempted from T3 and Schedule 15 filing for 2023, 2024, and 2025; Bill C-15 received royal assent on March 26, 2026, so the requirement now applies for taxation years ending on or after December 31, 2026; and the enacted rules exempt most ordinary family arrangements while still capturing larger or more complex structures. The sensible course is to know where your bare trusts are, document beneficial ownership, and confirm whether a given arrangement is caught or exempt before the relevant deadline rather than acting on outdated guidance.

This article provides general information only and is not legal advice. The trust reporting rules and CRA administrative positions can change, and outcomes depend on the specific facts of your situation. Consult a qualified tax professional about your circumstances.

Bare Trusts and the New Trust Reporting Rules: What Canadians Need to Know