The bare trust relief is over. Here's who files for 2026
For three filing seasons, bare trusts got a pass. That ends with the 2026 year.
Bill C-15 received Royal Assent on March 26, 2026. It replaced the old catch-everything bare trust rule with a narrower one. Reportable bare trusts now file a T3 return and Schedule 15 for taxation years ending on or after December 31, 2026. The first deadline is March 31, 2027, right in the middle of busy season.
Here's the part most clients get backwards. The parent on title to a kid's house is usually fine now. The nominee corporation holding your client's plaza isn't. Neither is the farmland in Dad's name that the farm corporation really owns.
In this post, you'll learn how to spot a bare trust in your files, the three gates that decide who files, how common arrangements come out, what a miss costs, and how to get the returns out before March 31.
Where the rules landed after three years of back and forth
A quick history
The enhanced trust reporting rules were enacted in December 2022. They first applied to trust years ending after December 30, 2023, and they swept in bare trusts. Then the relief started.
- March 28, 2024: days before the first deadline, the CRA said bare trusts didn't need to file for 2023 unless asked
- October 2024: the same relief was extended to 2024
- December 16, 2025: the CRA confirmed no filings for 2024 or 2025, and said certain bare trusts would file for 2026
- March 26, 2026: Bill C-15 received Royal Assent
Here's a detail worth knowing. Bill C-15 repealed the original bare trust rule retroactively for 2024 and 2025. Those years weren't waived. The obligation was taken off the books.
And some clients filed anyway. Over 54,000 bare trust returns came in for 2023 by mid-April 2024. If your client was one of them, they likely have a trust account number already. They still need to re-test the arrangement under the new rules.
Don't plan around a fourth reprieve
The CRA's trust reporting FAQ was updated on October 5, 2026. It says plainly that certain bare trusts are required to file for taxation years ending on or after December 31, 2026. Doane Grant Thornton's September update says no further relief is anticipated.
Could the CRA soften things at the last minute? It did in 2024. But nobody is signalling it this time, and a March plan built on a maybe is a bad bet.
It's the trust's year, not your client's year-end
This trips people up. The 2026 year here is the bare trust's taxation year, and bare trusts have a calendar year-end.
So a client with a June 30 corporate year-end isn't off the hook.
And winding it up in December doesn't skip anything. A bare trust that ends during 2026 still has a 2026 taxation year. If it's reportable and not exempt, it likely still files.
Gate one: is it a bare trust at all?
What makes it "bare"
A bare trust separates legal title from beneficial ownership. The person on title acts as agent and nominee. They have no independent discretion, they act only on the beneficial owner's direction, and they hand the property over on demand.
Often there's no written trust document at all, which is why clients don't recognize them.
What isn't a bare trust:
- A tenant, borrower, or licensee. Possession isn't ownership
- An executor administering an estate under a will
- A discretionary family trust. That's a real trust, and it's been filing with Schedule 15 since 2023
- Anyone with genuine independent duties or discretion over the property
The CRA won't make the call for you. It treats this as a question of fact and law and points taxpayers to legal advisors. Budget for that on the unclear files.
Where they hide in your files
You've probably seen most of these this year without labelling them:
- Nominee corporations you prepare nil T2s and compilations for
- Fixed asset continuities where the registered owner on title doesn't match the balance sheet
- Vehicles registered to a shareholder but carried on the corporation's books, or the reverse
- Joint venture and co-ownership agreements sitting in the permanent file
- Limited partnership structures where a separate titleholder company holds the land
- In-trust-for accounts and convenience joint accounts on the T1 side
Start by sorting your client list for numbered companies with no revenue and one asset. That's where the nominees live.
Gates two and three: the exemptions
Gate two: bare trust exclusions
If it's a bare trust, check the exclusions in subsection 150(1.31). An arrangement that fits one isn't a reportable bare trust for that year. The ones you'll use most:
- Mirror ownership. Every beneficial owner is on title and everyone on title is a beneficial owner. Think of a joint spousal investment account
- Related individuals and a principal residence. All the legal owners are related individuals, and the property could be the principal residence of at least one of them. This covers a parent on title so a child can get a mortgage. "Related" now includes aunts, uncles, nieces, and nephews
- Spousal home. One spouse is on title to the family home held for both of them
- Partnership property. Each legal owner is a partner holding the property solely for the partnership, and a T5013 is required
- Court orders, such as property held under a matrimonial order
A few narrower ones cover resource property, government funds held by non-profits, and certain securities dealers.
Notice what these have in common. Most need individuals or a partner as the legal owner. A corporation on title can't use the family exclusions.
Gate three: listed trust exemptions
If no exclusion fits, check whether the arrangement is a listed trust for the year. The CRA's FAQ confirms that a reportable bare trust that's a listed trust doesn't file a T3 at all unless the CRA asks. The relevant categories:
- Under three months. Most closing and escrow arrangements land here
- $50,000 or less throughout the year. Total fair market value, any type of asset
- The $250,000 family test. Every trustee is an individual, every beneficiary is an individual related to each trustee, total value stays at or below $250,000 throughout the year, and the trust holds only qualifying assets
That last condition matters. Qualifying assets include money, deposits at Canadian financial institutions, GICs, listed securities, mutual fund units, exempt life insurance policies, and personal-use property such as a cottage. Rental property, private company shares, and partnership units don't qualify. So this test rarely rescues a real estate or business arrangement.
"Throughout the year" is doing a lot of work
Both dollar tests apply at every point in the year, not just at December 31.
Say a grandparent's in-trust-for account starts 2026 at $45,000 and ends at $58,000. It fails the $50,000 test, even though it was under the line for most of the year. It may still pass the $250,000 family test if the parties are related individuals and it holds qualifying assets.
The CRA's own example shows it across years. A daughter is added to her father's account to help with bills. It peaks at $16,000 in 2026, so no filing. In 2027 it peaks at $310,000, and now it files.
For anything near a threshold, track values during the year.
If nothing fits, it files
A bare trust that clears gate one and fails gates two and three files a T3 return and Schedule 15 for 2026 by March 31, 2027.
How common files come out
Here's how common Ontario arrangements come out. Every one depends on the facts.
- Nominee corporation holding a $3.2 million plaza for an operating company: files. The legal owner is a corporation and the value is well over $50,000
- Bare trustee holding development land for a limited partnership, where the trustee isn't a partner: files. The partnership exclusion needs the legal owner to be a partner
- General partner holding title to partnership property, T5013 filed: exempt
- Mom on title to her son's Brampton home so he could qualify for the mortgage: exempt under the related individuals and principal residence exclusion
- Daughter alone on title to her mother's rental condo: files. A rental can't be the principal residence of the legal owner
- Farmland in Dad's name, beneficially owned by the family farm corporation: files. The beneficial owner is a corporation, so the family exclusions don't apply
- Daughter added to Dad's chequing account, peak balance $120,000: exempt under the $250,000 family test. It's cash, and they're related individuals
- New $85,000 pickup registered to the shareholder, owned by the corporation: files if it's a bare trust. An older $30,000 car stays under the $50,000 line
- Purchase held in escrow for six weeks around closing: exempt as a trust in existence for less than three months
See the pattern? Miller Thomson reaches the same conclusion. The 2026 population is mostly corporate and commercial, not family homes.
What a miss costs
The ordinary penalty
Late filing costs $25 a day, with a $100 minimum and a $2,500 maximum per return. It applies even when the trust owes no tax, which is every bare trust.
An incomplete Schedule 15 counts as a return that hasn't met the filing obligation. The CRA's FAQ walks through an example where a missing tax identification number keeps the penalty running until the notice of assessment.
The big one
Where a failure to file happens knowingly or through gross negligence, the penalty is the greater of $2,500 or 5% of the highest fair market value of the trust property during the year.
Run that on the plaza. Five percent of $3.2 million is $160,000.
That penalty isn't automatic. It needs knowledge or gross negligence. But ignoring a demand to file can get there, and after three years of headlines, "we didn't know" is a harder argument.
One for the beneficial owners
A person who doesn't give their SIN or other tax number to the trustee filing the return can face a $100 penalty. Tell clients early that you'll need everyone's numbers.
Getting the 2026 returns out the door
Get the trust account number now
You need a trust account number to file. Trustees and authorized representatives can register online through My Account, My Business Account, or Represent a Client, and the number comes back right away. The CRA asks for a signed copy of the trust document.
If there's no written document, consider having one prepared. Miller Thomson recommends this, and it makes your analysis easier to defend later.
For naming, the CRA wants the name from the trust document if there is one. If not, use the beneficial owner's legal name followed by "Trust," within the 60-character limit for online services.
The T3 is short. Schedule 15 isn't
For a reportable bare trust, the CRA only needs the lines marked with a checkmark on the T3. Income and gains stay on the beneficial owner's return.
The real work is Schedule 15. For every trustee, beneficiary, settlor, and controlling person, you need:
- Name and address
- Date of birth, for individuals
- Country of residence
- Tax identification number
Multiple parties or a non-resident investor can stretch this out. Start collecting in November.
Plan the capacity
March 31 lands on top of T4 and T5 season, family trust T3s, and early T1 prep. Decide now:
- Whether bare trust T3s are in scope on each engagement letter
- What you'll charge, and whether clients know
- Who signs as trustee, which is usually a director of the nominee corporation
- Who on staff owns the Schedule 15 follow-ups
Paper the exempt ones
For every arrangement you conclude is exempt, write a short file memo saying why. If the CRA asks in 2028 why no return was filed, you'll want the answer in writing from 2026.
Where characterization is truly unclear, a protective filing is an option. The CRA's FAQ says filing a T3 for something that turns out not to be a trust doesn't create one. The trade-off is the fee and putting the information on file.
Clean up the leftovers, for 2027
A nominee company left over from a finished project may not serve any purpose now. Winding it up can avoid filings for 2027 and later, but not 2026.
Your year-end checklist
- Sort your client list for nominee companies, joint ventures, and titleholder structures
- Run title checks wherever the registered owner and the books disagree
- Flag ITF and convenience joint accounts on the T1 side
- Test every arrangement against the three gates
- Track values during the year for anything near $50,000 or $250,000
- Register trust account numbers before January
- Collect Schedule 15 information, starting with tax numbers
- Write an exemption memo for each arrangement that doesn't file
- Update engagement letters and fee quotes for the T3 work
- Book March capacity now
The bottom line
- The relief is over. Reportable bare trusts file a T3 and Schedule 15 for 2026, due March 31, 2027
- It runs on the calendar year. Your client's fiscal year-end doesn't matter, and a December wind-up doesn't skip 2026
- Most family arrangements are out. The parent on title for a mortgage and joint spousal accounts are generally exempt
- Commercial ones are in. Nominee corporations, development titleholders, and farmland held personally for a corporation will usually file
- "Throughout the year" decides the dollar tests. One high month can sink the $50,000 exemption
- Gross negligence is expensive. It's 5% of the highest property value, which runs into six figures on real estate
This is a new compliance line for a lot of firms, and the CRA will keep adding to its guidance before filing season. We'll track the updates and what they mean for your files. Come back to The Adjusting Entries next week for the next post.