Bare Trust T3 Filing 2026: Who Must File, What's Exempt, and the March 31, 2027 Deadline

Key takeaways: bare trust filing for 2026

• 01Bill C-15 received Royal Assent March 26, 2026. First real bare trust T3 filings for the 2026 taxation year are due March 31, 2027 for December 31 year ends.
• 02Trusts holding assets under $50,000 throughout the year are exempt. Bill C-15 removed the earlier restriction to money and securities; any asset type now qualifies. Exceeding $50,000 at any point during the year kills the exemption.
• 03Family trusts where all trustees are individuals and all beneficiaries are related to each trustee can hold up to $250,000 in qualifying assets and remain exempt.
• 04Joint spousal accounts (mirror ownership) and parent-on-title-to-child's-principal-residence structures are exempt. A cottage held in one child's name for probate is reportable.
• 05Nominee corporations holding real estate, development bare trusts, and large "in trust for" accounts all require a T3 and Schedule 15 for 2026.
• 06The bare trust itself does not pay income tax. Income earned inside a bare trust flows through to the beneficial owner and is taxed on their personal return. The T3 is a reporting filing, not a tax-owing filing.
• 07Late-filing penalty is $25 per day ($100 minimum, $2,500 maximum). Gross negligence: greater of $2,500 or 5% of trust FMV. On a $600,000 cottage that reaches $30,000.
• 08Q4 2026 is the practical window: identify every legal-title-differs-from-beneficial-owner arrangement, gather Schedule 15 party information, book an estate and trust review.

Published September 23, 2026 by Zohaib Zafar, Estate and Trust Lead at Sapere. Updated September 23, 2026.

For three tax years running, the CRA told Canadians with bare trust arrangements they did not need to file. 2023, 2024, 2025: all waived. That relief expires with the 2026 tax year. Bill C-15 received Royal Assent on March 26, 2026, rewrote the bare trust reporting regime, and made the first real filings due by March 31, 2027.

Most of the owner-managers we serve are not sure whether they hold a bare trust arrangement or whether the new rules catch them. The answer for a lot of common structures, like a cottage in one adult child's name, a rental property held through a nominee, a family limited partnership with a bare trustee on title, is: it depends, and the details matter now in a way they did not for the last three years.

This guide walks through what changed under Bill C-15, who is exempt under the redrawn thresholds, which arrangements still require a T3 and Schedule 15 for the 2026 taxation year, what the penalties look like, and the practical work owner-managers should do before December 31, 2026 to file correctly the first time.

What is a bare trust under Canadian tax law?

A bare trust is an arrangement where one party (the trustee, sometimes called a nominee) holds legal title to property but has no independent power to deal with it. The beneficial owner retains full control and receives all the income. The trustee's role is administrative: hold the title, follow instructions, transfer on demand. Bare trusts show up constantly in Canadian real estate, family, and business structures, often without the parties realizing they have one.

Common bare trust arrangements in the owner-managed world:

• 01A parent added to an adult child's home title to help with mortgage financing
• 02An adult child on title to a parent's principal residence for probate planning
• 03A nominee corporation holding real estate for the beneficial owners in a joint venture
• 04A general partner holding title to partnership real estate for a limited partnership
• 05An "in trust for" bank or brokerage account
• 06A holding structure where one shareholder's name is on the corporate title but another party is the true owner

The Income Tax Act does not use the phrase "bare trust" directly, which is part of what makes the reporting regime confusing. Whether an arrangement counts depends on the facts of who controls, who benefits, and how the paperwork is structured.

What are the tax implications of a bare trust?

A bare trust is generally transparent for Canadian income tax purposes. The trust itself does not pay tax on income earned by its assets. Rental income from a cottage held in a bare trust, interest on an in-trust-for account, and capital gains on the underlying property are all reported directly on the beneficial owner's personal or corporate return, exactly as if they held title themselves.

The T3 filing added by Bill C-15 is a reporting requirement, not a tax-owing requirement. Filing the T3 does not create new tax; not filing it does not avoid tax that is already owed by the beneficial owner. The two questions (who reports the income and who files the T3) run on separate tracks. Canada also does not levy inheritance tax on trust property; the tax questions on death are capital gains under the deemed disposition rules and, provincially, probate fees on the estate. A bare trust does not eliminate either of those on its own.

Do I need to file a T3 for my bare trust in 2026?

Yes, unless the arrangement fits one of the exceptions in subsection 150(1.31) of the Income Tax Act. For taxation years ending on or after December 31, 2026, certain bare trusts are subject to trust reporting under subsection 150(1.3). The CRA refers to these as "reportable bare trusts." The first T3 return, with Schedule 15, is due March 31, 2027 for a bare trust with a December 31, 2026 year end.

If your bare trust arrangement holds under $50,000 in assets throughout the year, existed for less than three months, is a mirror-ownership arrangement between related parties on a principal residence, or fits one of the specific carve-outs discussed below, no filing is required. Everything else files.

What changed under Bill C-15?

Bill C-15 did three important things when it received Royal Assent on March 26, 2026. It retroactively repealed the original bare trust reporting rules for the 2023 taxation year (so no back-filing is required for anyone who complied with CRA relief), it extended the CRA administrative waiver forward through the 2025 taxation year, and it redrew the exemption landscape starting with the 2026 taxation year.

The rewrite is meaningfully narrower than the original 2022 proposal. The revised rules apply to specifically identified bare trust arrangements rather than any arrangement where legal title is separated from beneficial ownership, which was the original blanket language. Owner-managers who felt they had been caught in a sweep now have to look at whether their specific structure fits the narrowed definition.

Effective dates matter here:

• 012023 taxation year: No filings required. CRA relief holds; Bill C-15 makes it retroactive.
• 022024 taxation year: No filings required. Bare trusts not subject to the reporting rules.
• 032025 taxation year: No filings required. Same treatment as 2024.
• 042026 taxation year: Reportable bare trusts must file. Deadline March 31, 2027 for December 31 year ends.

For details on the CRA's current administrative position, see the CRA enhanced reporting rules FAQ and the CRA T3 what-changed page.

What are the exemptions for bare trusts in 2026?

The Bill C-15 exemptions fall into two buckets: general listed-trust exemptions that apply to any trust (bare or otherwise), and bare-trust-specific carve-outs. If a bare trust fits any exemption in either bucket, no T3 filing is required for the 2026 tax year.

General listed-trust exemptions:

• 01The $50,000 threshold. A trust whose total fair market value of assets does not exceed $50,000 throughout the entire year is exempt. Bill C-15 removed the earlier restriction that limited this to money, government debt, and listed securities. Any asset type now qualifies.
• 02The $250,000 family trust threshold. Where every trustee is an individual and every beneficiary is an individual related to each trustee, the trust can hold up to $250,000 in qualifying assets (money, GICs, personal-use property, similar low-risk holdings) and remain exempt.
• 03The three-month rule. Trusts in existence for less than three months are exempt. This shelters most real estate closing escrows and short-term custodial arrangements.

Bare-trust-specific exemptions:

• 01Mirror ownership. Where the legal owner and the beneficial owner are the same party, the arrangement is not a bare trust for reporting purposes. Joint spousal bank and brokerage accounts are the everyday example.
• 02Related individuals with principal residence potential. A parent added to an adult child's home title to help qualify for a mortgage, or an adult child on a parent's principal residence for probate planning, is exempt as long as the parties are related and the property qualifies as a principal residence for one of them.
• 03Partnership property with T5013 filed. A general partner holding title to real estate on behalf of a limited partnership is exempt where the partnership files a T5013 partnership return. This is a common structure in real estate limited partnerships.
• 04Court-ordered arrangements. Matrimonial trusts arising from separation agreements, constructive trusts imposed by a court, and similar court-mandated structures are exempt.

The exemption analysis has to be done for every bare trust independently. A family that holds one property under a mirror-ownership spousal arrangement and another through a nominee corporation has one exempt arrangement and one reportable one, both requiring separate review.

Which arrangements are still caught for the 2026 tax year?

The categories where we see the most exposure in our client base:

• 01A cottage or investment property held in one adult child's name for probate avoidance. If the property is not the child's principal residence and the parent retains beneficial ownership, the arrangement is reportable. Probate planning through informal title transfers is one of the most common bare trust structures across Canadian owner-manager families, and one of the most likely to be caught by the 2026 rules.
• 02Nominee corporations holding real estate. A corporation whose sole purpose is to hold legal title on behalf of one or more beneficial owners is a bare trust. This structure is used constantly in Ontario commercial real estate and in Alberta investment property holdings. Every nominee corporation arrangement needs a Schedule 15 review before December 31, 2026.
• 03Development bare trusts. A bare trustee holding land for a family or third-party limited partnership, where the trustee is not itself a partner and the T5013 does not cover the arrangement, is reportable.
• 04Joint venture nominee arrangements. Where two or more unrelated parties use a single nominee to hold legal title to a co-owned property, the arrangement is reportable.
• 05Large "in trust for" accounts. Bank or brokerage "in trust for" accounts holding more than $50,000 (or $250,000 where the family trust exemption applies) are reportable. Grandparent accounts holding investments for grandchildren are the common case.
• 06Corporate title held for beneficial owners in a share-transfer context. Arrangements where legal title to shares is held by one party pending transfer to the beneficial owner are reportable if the value crosses the threshold and no other exemption applies.

If any of these structures exist in your family or business, the 2026 filing is not optional. For a legal-planning lens on additional structural examples, Miller Thomson's August 2026 bare trust analysis walks through more edge cases, and Grant Thornton's bare trust guidance covers the same ground from a national-CPA-firm perspective.

How does the 2026 bare trust rule interact with cottage-in-child's-name probate planning?

The single most common bare trust structure across Canadian owner-manager families is a cottage or vacation property held in one adult child's name to avoid probate at the parent's death. The 2026 rule catches most of these, and the interaction with the underlying capital gains and probate math is where it hurts most.

The classic setup: parents own a cottage. To avoid Ontario's Estate Administration Tax (roughly 1.5% of estate value above $50,000) or the equivalent probate fee in another province, the parents transfer title to an adult child while retaining full use and control. On paper the child owns the cottage. In practice, the parents pay the property tax, cover maintenance, and treat the cottage as theirs. That is a bare trust.

Three things are true about this structure under the new rules and the pre-existing tax framework:

• 01The transfer itself triggered capital gains. When title was transferred to the child, CRA treats it as a deemed disposition at fair market value on the parents' side. Any accrued gain from purchase price to transfer-day FMV is taxable in the year of transfer. This is not new for 2026; it was always the tax cost of the workaround.
• 02The cottage does not qualify for the principal residence exemption alongside the parents' primary home. Only one property per family unit can be designated principal residence for a given year. If the parents' primary home carries the exemption, the cottage's accrued gain is fully taxable.
• 03The bare trust arrangement is now reportable. Starting with the 2026 tax year, the child (as trustee-in-fact) files a T3 return with Schedule 15 by March 31, 2027, disclosing the parents as beneficial owners. Missing that filing exposes the arrangement to $25 per day, up to $2,500, plus the 5% gross negligence penalty on a $600,000 cottage (roughly $30,000) if CRA finds the failure was knowing or grossly negligent.

There is also a legal-doctrine risk called a resulting trust that applies independently of the tax rules. Canadian courts will often presume that when a parent transfers property to an adult child for no consideration, the child holds the property in trust for the parent's estate unless there is clear written evidence of an intended outright gift. This means the probate-avoidance objective can fail on its own terms: the property gets pulled back into the estate at death, probate fees apply anyway, and the bare trust filings still had to be done in the meantime.

For families in this position, Q4 2026 is the right window to decide between three paths: keep the arrangement and file annual T3 returns, restructure into a formal alter-ego or joint spousal trust that avoids probate under different rules, or unwind the transfer entirely and accept probate at death. All three have tax, estate-planning, and family-dynamics tradeoffs that a one-hour review with a CPA who does estate work can size.

When is the T3 due for the 2026 taxation year?

For a bare trust with a December 31, 2026 year end, the T3 return and Schedule 15 are due March 31, 2027. This is 90 days after the trust's year end, which is the general T3 filing rule. Trusts with non-calendar year ends have the same 90-day window from year end. There are no automatic extensions.

The deadline math matters because most owner-managed bare trusts have December 31 year ends, which puts the workload in Q1 2027 on top of personal tax season. Q4 2026 is the window to identify structures and gather party information; the actual return preparation follows in January and February 2027.

Who needs to file Schedule 15 and what information does it require?

Any non-listed trust that files a T3 return must include Schedule 15, the beneficial ownership disclosure form. That covers reportable bare trusts, express family trusts, most testamentary trusts once beyond the graduated rate estate window, and any trust that does not qualify for a listed-trust exemption. Listed trusts and trusts under the $50,000 or $250,000 exemption thresholds do not file Schedule 15 because they do not file a T3.

For each reportable entity, the schedule requires:

• 01Legal name
• 02Address
• 03Date of birth (for individuals)
• 04Country of tax residence
• 05Tax identification number (SIN for Canadian residents, TIN for foreign residents)

For beneficiaries who are not individually named but described (a class like "my children" or "my grandchildren"), the trustee must provide either full information on each identified member of the class or a description sufficient to determine with certainty whether any particular person is a member.

The compliance burden of Schedule 15 is not the paperwork itself. It is the SIN and DOB collection for parties who may not have expected to have to hand it over: adult children of principal residence beneficiaries, grandparent beneficiaries on family trusts, or business co-venturers whose personal information is now on a CRA filing.

What are the penalties for missing the March 31, 2027 deadline?

Two penalty regimes apply. Neither is theoretical; both have been assessed by CRA in the trust-reporting context in prior years.

Late filing penalty (subsection 162(7)). For a bare trust with no unpaid tax, the penalty for filing late runs $25 per day, minimum $100, maximum $2,500. The maximum is reached after 100 days of lateness. On a bare trust owing no tax, this is the everyday exposure for missing the deadline.

Gross negligence penalty (subsection 163(5)). Where the failure to file or the content of the filing involves knowing false statements or gross negligence, the penalty is the greater of $2,500 or 5% of the highest fair market value of all property held by the trust at any time during the year. For a bare trust holding a $600,000 cottage, the gross negligence penalty is $30,000.

The gross negligence penalty is what CRA reaches for when the filing is materially wrong or when the trustee should have known filing was required and did not. It is not applied casually, but it is applied.

There is also a $100 penalty for failure to provide required TINs under subsection 162(6), and additional penalties for late filing where the trust does have unpaid tax under subsections 162(1) and 162(2).

What should owner-managers do before December 31, 2026?

Four practical steps for owner-managers who suspect they hold a reportable bare trust:

• 01Identify every arrangement where legal title differs from beneficial ownership. Real estate held in one name for another's benefit, corporate shares held by a nominee, "in trust for" accounts, family cottages in a single child's name. If the two are not the same party, there is a bare trust question to answer.
• 02Test each arrangement against the Bill C-15 exemptions. The $50,000 threshold, the $250,000 family trust threshold, mirror ownership, the principal residence carve-out, the T5013 partnership exemption, and the three-month rule. Most owner-manager cottage-in-one-name structures will be reportable; most spousal joint accounts and parent-on-title-to-child-principal-residence arrangements will not.
• 03Gather Schedule 15 party information. Legal names, addresses, dates of birth, tax residence, and SINs for every trustee, settlor, beneficiary, and controlling person. Get this in October or November 2026; do not wait until February 2027 when you also owe personal tax preparation.
• 04Book an estate and trust review. A one-hour review with a CPA who does estate and trust work is enough to identify which arrangements need to file, which do not, and whether a restructuring in Q4 2026 could move a reportable arrangement into an exempt category before year end.

For owner-managers with older informal structures (cottages held in one child's name for decades, nominee corporations set up before probate planning was on the radar), Q4 2026 is also a reasonable window to consider whether the arrangement is worth keeping in its current form. Some are cleaner to restructure than to report annually.

How Sapere handles bare trust reviews

Sapere's Corporate and Estate group reviews bare trust arrangements as part of our standard year-end estate planning work, with three deliverables: a written identification of every arrangement in the family or business structure, a filing or no-filing determination for each with reasoning under the Bill C-15 exemptions, and a Schedule 15 party-information workbook to collect what the T3 return will need.

Where a restructuring makes sense before December 31, 2026 (moving a cottage from a bare trust into a formal estate plan, collapsing a nominee corporation whose original purpose no longer applies), we scope that work as an addition to the review. Our estate planning service covers the structural work and our tax services cover the actual T3 and Schedule 15 preparation.

For families with cross-border exposure, like a US resident beneficiary on an in-trust-for account or a US property held through a Canadian nominee corp, the Schedule 15 filing adds a US disclosure layer that has to be handled at the same time. Our cross-border tax team runs both sides.

If you think you may hold a reportable bare trust and want a candid read on whether Bill C-15 catches you, Book a free consultation. We will look at the structures, apply the Bill C-15 exemption tests, and give you a clean answer on what needs to file by March 31, 2027 and what does not.

For firm-wide tax updates and estate planning notes through the year, follow our Sapere LinkedIn Page.