Bare Trust Reporting Is Back: CRA Confirms $2,500 Penalty Trap

Bare trust reporting is coming back for Canadians who hold property in someone else’s name, and the Canada Revenue Agency has refreshed its guidance ahead of the first real filing season. After three years of waivers, the CRA says certain bare trusts must file a T3 return with beneficial ownership details for taxation years ending on or after December 31, 2026.

OTTAWA, Canada – 08 October 2026

The update follows Bill C-15, the Budget 2025 Implementation Act, No. 1, which received Royal Assent on 26 March 2026 and rewrote the bare trust rules from scratch. According to Canadian tax press coverage, the CRA refreshed its trust-reporting FAQ and EFILE notice on 5 October, with less than three months left before the first reportable year-end.

That’s a short runway. Families with a parent’s name on a child’s condo, a numbered company holding land for a partnership, or a “nominee” sitting on title for somebody else all need to work out whether they’re caught.

What changed in Canada’s bare trust reporting rules?

Canada’s bare trust reporting rules now apply to taxation years ending on or after December 31, 2026, under the regime enacted by Bill C-15 on 26 March 2026. Reportable bare trusts must file a T3 return and Schedule 15 listing trustees, beneficiaries and settlors. Returns for 2023, 2024 and 2025 aren’t required unless the CRA asks directly.

The original 2023 rules were a mess. They caught joint bank accounts, parents co-signing on a kid’s mortgage and countless harmless arrangements, which is why the CRA waived filing three years running. Canada’s own Taxpayers’ Ombudsperson later published a special report on the fallout titled “Unintended Consequences.” Advisor.ca reported that around 52,000 bare trust returns were filed for 2023 anyway, mostly out of caution.

Bill C-15 repealed that version retroactively and replaced it with a narrower test, according to EY Canada’s Royal Assent alert and analysis from Miller Thomson LLP. Narrower doesn’t mean gone. It’s the same beneficial ownership push you’ve seen with the UK trust register changes and the EU beneficial ownership register, and it’s why we keep steering clients with real exposure toward properly drafted asset protection trusts instead of informal nominee setups.

Who must file a bare trust return for 2026?

You must file a bare trust return for 2026 if you hold legal title to property for someone else, the arrangement isn’t a listed trust, and no bare-trust exemption applies. Typical examples include nominee corporations holding real estate, an adult child on title to a parent’s rental or cottage, and farmland registered personally but owned by a farm company.

Miller Thomson’s August analysis also flags a bare trustee holding land for a development limited partnership where the trustee isn’t a partner. “In trust for” accounts and convenience joint accounts sit in a grey zone that turns on value.

This is where people get burned. In our experience, the arrangements that cause trouble are the ones nobody thinks of as a trust at all: a brother-in-law who “just holds the shares,” or a holding company that took title to a cottage twenty years ago. Nobody wrote anything down, so nobody flags it.

Which bare trust exemptions apply?

The main bare trust exemptions are a $50,000 cap on total fair market value held throughout the year, and a $250,000 cap where every trustee and beneficiary is a related individual holding specified low-risk assets. Mirror ownership, related-party principal residences, partnership property reported on a T5013, and court-ordered arrangements are also excluded.

Read that $50,000 number twice. It’s a test for the whole year, so a brokerage account that spikes above the line for a single month can tip you into bare trust reporting.

What are the bare trust penalties?

Bare trust penalties start at $25 per day for a late T3, with a $100 minimum and a $2,500 maximum per return, even when no tax is owing. Knowingly or grossly negligently failing to file, or making a false statement, costs the greater of $2,500 or 5% of the trust’s highest fair market value during the year.

On a $1 million rental property held by a nominee, that 5% figure lands at $50,000. Wake-up call doesn’t quite cover it. The CRA’s own enhanced trust reporting FAQ also notes a $100 penalty for a reportable entity that won’t give the trustee its tax identification number.

Canadians already planning a move should also remember the country’s departure tax, one reason exit taxes are spreading across the West. Clean ownership records make that deemed-disposition calculation dead simple. Messy nominee arrangements do the opposite.

Bare trust reporting FAQ

Bare trust reporting is one more brick in the global beneficial ownership wall. For a wider view of where reporting is heading, see our coverage of asset protection strategies.