Bare trusts in Canada: the arrangement and the filing question

Bare trust reporting has been introduced, relieved, legislated away and reinstated in narrower form within four years. The arrangement is ordinary; its reporting is not. This guide separates the two.

What a bare trust actually is

The term is not defined in the Income Tax Act. Subsection 104(1) provides that a bare trust for income tax purposes is a trust arrangement under which the trustee can reasonably be considered to act as agent for all the beneficiaries with respect to all dealings with all of the trust’s property.

The CRA’s test: the trustee acts as agent when they have no significant powers, act only on the beneficiary’s instructions, and simply hold legal title.

A family trustee exercises discretion and owes fiduciary duties. A bare trustee is a nameplate: title sits with them, while possession, use, risk and control sit elsewhere.

Why owners hold property this way

Bare trust arrangements are common, and most exist for reasons unrelated to tax. The CRA’s own example is a property developer establishing a bare trust to hold registered title for privacy reasons while retaining beneficial ownership. Other everyday patterns include:

• A parent added to a child’s title, or a child to a parent’s, to simplify administration — often without either intending a gift.
• A corporation holding title to land that a related operating company actually uses and pays for.
• A nominee company holding title for several co-venturers, or a person named on an account purely for access.

The filing question, and why it keeps moving

Bare trusts were brought into the enhanced trust reporting rules for taxation years ending on or after December 31, 2023, requiring a T3 with Schedule 15 for countless ordinary arrangements.

• 2023 taxation year. In a tax tip issued March 28, 2024, in recognition (in the CRA’s words) that the rules had an unintended impact on Canadians, the CRA announced it would not require bare trusts to file a T3 return, including Schedule 15, for 2023 unless it made a direct request for those filings.
• 2024 and 2025 taxation years. Bare trusts are not subject to the trust reporting rules and are therefore not required to file a T3 return, including Schedule 15, for taxation years ending on or after December 31, 2024 and before December 31, 2026.
• Taxation years ending on or after December 31, 2026. Certain bare trusts are subject to the rules. These are described in subsection 150(1.3), subject to several exceptions in subsection 150(1.31), and the CRA refers to them as reportable bare trusts. The CRA has said further information would be added ahead of the relevant filing season.

Read that list carefully. The requirement is narrowing, but “certain bare trusts” is defined by statute and CRA guidance was still developing. Confirm the requirement for the taxation year you are filing before preparing a return or deciding not to.

What a bare trust return looks like when one is required

A bare trust return is mostly blank. Enter the bare trust code and creation date, send the trust document in the first filing year unless already submitted, and complete Schedule 15 in full. All income, gains and losses go on the beneficial owner’s return.

What to do now, regardless of the year

The reporting requirement has moved. The underlying facts have not, and they are what any future filing gets built from.

• Identify the arrangements. Walk the titles, accounts and registrations in your business and family, and note anywhere legal title and beneficial ownership sit with different people.
• Get the characterization right. Bare trust, express trust, joint ownership and agency are different things with different consequences.
• Write it down. Many bare trusts are undocumented. A short declaration recording who holds title, for whom, and since when belongs in the permanent side of your record retention system.
• Watch the adjacent regimes. The same arrangement can matter for the Underused Housing Tax, where holding property as a trustee is its own ownership capacity, and for the wider expanded T3 reporting rules if it turns out not to be a bare trust at all.

The bottom line

A bare trust is simple: one name on title, someone else holding the substance. Whether it must report annually has kept changing: relief, then legislation, with a narrower rule scheduled. Document the arrangement now and confirm the requirement each year.

This article is general information for Canadian business owners and is current as of July 2026. It is not tax, legal or accounting advice, and it does not create a client relationship. Tax rules change and your situation is unique, so please speak with a CPA before acting on anything here.