Few Canadian tax measures have been announced, deferred, deferred again, deferred a third time, rewritten and reintroduced quite like the bare trust reporting rules. The result is that a great many business owners stopped paying attention somewhere around the second reprieve, which is understandable and is about to become expensive, because the fourth year is the one that counts.
Key Takeaway
Bare trusts were exempted from T3 filing for the 2023, 2024 and 2025 taxation years, the first exemption announced March 28, 2024, days before that year's deadline and after many trustees had already filed. Mandatory filing begins for taxation years ending on or after December 31, 2026, meaning the first bare trust T3 returns are due by roughly March 2027. The rules were also substantially narrowed: August 2025 draft legislation, confirmed in the November 2025 federal budget and introduced through Bill C-15, would limit reporting to bare trusts that are also express trusts, and adds exemptions for trusts holding $50,000 or less in total assets with no asset-type restriction, joint spousal accounts, and a parent on title for a child's principal residence. Those carve-outs closely track the arrangements that generated public complaint, which were overwhelmingly personal. Common business arrangements, nominee corporations holding real property and shares held by one party for another, largely remain in scope.
The Date That Matters
If a reader takes one thing from this article, it is this date.
Mandatory filing for bare trusts begins with taxation years ending on or after December 31, 2026, as confirmed by a CRA announcement on December 16, 2025, with the bare trust deferral meaning no filings are expected for 2025 and the first bare trust T3s due by March 2027, covering the 2026 year[1]. The Scotia Wealth summary states the same position: in the November 2025 federal budget the government confirmed its intention to proceed with the August 2025 draft legislation pertaining to bare trusts, effective for taxation years ending December 31, 2026, or later[2].
The practical implication is that the 2026 calendar year, the one currently in progress, is the first reportable year. Whatever arrangements exist at December 31, 2026 are what gets reported, and the window for identifying them, restructuring where appropriate, or confirming an exemption applies is the remainder of this year rather than the spring of 2027.
Three Years Of Reprieves
The sequence is worth setting out because it explains why so many people have stopped tracking it.
The enhanced trust reporting rules were first introduced in the 2018 federal budget and subsequently enacted for taxation years ending after December 30, 2023[3]. Unless an exemption applies, all trusts with a taxation year ending on December 31, 2023 or later must file a T3 even if the trust has no tax payable, no capital gain and no disposition of capital property in the year[4].
Then the deferrals. On March 28, 2024 the CRA announced it would not require bare trusts to file for the 2023 tax year unless it made a direct request[5]. On October 29, 2024 the CRA extended that relief and confirmed bare trusts were not required to file for taxation years ending in 2024, again subject to direct request[6]. On December 16, 2025 the CRA announced it did not expect bare trusts to file for 2025, a position consistent with draft legislation released in November 2025[7].
Three exemptions across three years, each announced separately, each conditional, none of them a repeal. A reasonable business owner who concluded after the second that the requirement would never actually take effect was drawing an inference the pattern supported, and the pattern has now broken.
The March 2024 Episode
The first deferral deserves its own treatment because of how it happened, and because it explains the professional frustration that surrounds this file.
The T3 and Schedule 15 filing deadline for most trusts was March 30, 2024, treated as met if received or postmarked by April 2, 2024, the next business day[5]. The CRA's exemption announcement came on March 28, 2024[5], which is to say two business days before the deadline. Prior to that announcement, many trustees of bare trusts had already filed T3s based on the rules as originally announced[7].
The CRA's stated reason was candid: the announcement was made in recognition that the new reporting requirements for bare trusts had had an unintended impact on Canadians[5]. That is an unusually direct acknowledgment that a measure had swept in arrangements it was not designed to capture.
The cost of that timing fell on accountants and their clients: work performed, fees incurred, and filings made that turned out not to be required, discovered after the fact. It is worth recording because the reforms discussed below are, in substance, the policy response to that episode, and because it is the reason a lot of Canadian advisors treat announcements in this area with visible caution.
What A Bare Trust Actually Is
The definitional problem is the root of everything else, and the CRA has been explicit that it is fact-dependent.
The CRA's position is that it considers a trustee to be acting as agent for a beneficiary when the trustee has no significant powers or responsibilities, cannot take action without the beneficiary's instructions, and functions only to hold legal title to the property[4]. The arrangement contemplated is one under which a legal owner of property holds the property for the benefit of others, the beneficial owner, and the legal owner can reasonably be considered to act as agent for the beneficial owners[7].
The CRA has also stated plainly that whether an arrangement is a trust or a bare trust depends on the specific facts of each situation as well as the applicable law, and that taxpayers may wish to seek legal counsel if unsure[5].
That is the crux. A bare trust is not a document you signed and filed away; it is a legal characterization of an arrangement, and it can exist without anyone having intended to create a trust or used the word. Nothing in a business's records necessarily flags one. That is why the identification problem discussed below is the real work, and why complexity in determining whether certain arrangements were bare trusts was itself the reason the CRA granted the exemptions[2].
The Express Trust Narrowing
The most consequential technical change, and one that receives less attention than the dollar-value exemptions.
The August 2025 draft legislation provides relief by repealing the broad inclusion of bare trusts for reporting purposes for tax years ending after December 30, 2024; instead, only bare trusts that are also express trusts under applicable law, and that do not meet a specific exception, will be required to file[3].
This is a meaningful narrowing. An express trust is one deliberately created, typically by a settlor with identifiable intention, rather than one arising by operation of law or by inference from an arrangement's characteristics. Limiting reporting to bare trusts that are also express trusts excludes a category of arrangements that were previously swept in simply because they functioned like a bare trust, regardless of whether anyone had set out to create one.
It also shifts the analytical question. Under the original rules the question was whether the arrangement had bare-trust characteristics. Under the amended rules it becomes whether there is also an express trust, which is a question about how the arrangement came into being rather than only how it operates. That is a legal determination, and one where the answer for a formally documented nominee arrangement may differ considerably from the answer for an informal family situation.
The New Exemptions
Bill C-15 proposes explicit statutory exemptions for several common bare-trust arrangements that had caused the most concern, specifically assets below $50,000, joint spousal accounts, and a parent on title for a child's principal residence[6].
The asset threshold is more generous than it first appears. Any trust holding no more than $50,000 in total assets throughout a year will be exempt from filing a T3 under the proposals, with no asset-type restrictions, eliminating the prior rule that only certain types of assets such as cash or government securities qualified[1]. Removing the asset-type restriction matters: the earlier version of this exemption was largely useless for arrangements holding real property or private company shares, which is most of the arrangements that concerned people.
A separate accommodation applies to short-lived arrangements: the new rules do not apply for 2024 and subsequent years to trusts that have been in existence for less than three months[4].
Other trusts exempt from the enhanced rules more broadly include charities, graduated rate estates, qualified disability trusts, health and welfare trusts, registered pension plans, employee profit sharing plans, and certain lawyers' general trust accounts, though notably not client-specific trust accounts[7]. That last distinction is worth flagging for professional firms holding client funds.
Who The Exemptions Actually Help
Here is the argument this article exists to make, and we present it as analysis rather than a finding in the sources.
Look at what the three headline exemptions cover: assets under $50,000, joint spousal accounts, and a parent on title for a child's principal residence. These are personal and family arrangements. They are also, precisely, the arrangements that generated the public outcry in early 2024, when ordinary Canadians discovered that adding an adult child to a bank account or being on title to help a child qualify for a mortgage had apparently created a trust with a filing obligation.
The policy response is well-targeted to that outcry. Someone who added their name to an elderly parent's chequing account is now clearly outside the regime, and that is a good outcome that removes a genuinely absurd result.
But the exemptions were designed against the complaints, and the complaints were overwhelmingly not from businesses. A business owner reading that bare trust reporting has been substantially relieved may reasonably conclude the problem is solved for them. For a meaningful set of ordinary commercial structures, it is not, which is the subject of the next section.
The Business Arrangements Left Behind
The categories worth checking, none of which is addressed by the three headline exemptions.
Nominee corporations holding real property. A very common Canadian structure in which a corporation holds legal title to real estate while beneficial ownership sits with a partnership, joint venture or another entity. This is close to a paradigm bare trust: the nominee has no significant powers, acts only on instruction, and exists solely to hold title. The property will ordinarily be worth far more than $50,000, it is not a spousal account, and it is not a child's principal residence.
Shares held by one person for another. Arrangements where a shareholder of record holds shares in trust for the true beneficial owner, whether for confidentiality, regulatory, or historical reasons. Again outside the three exemptions where the shares have meaningful value.
Assets held by a director or officer for the corporation. Licences, permits, vehicles, or property registered in an individual's name for practical reasons while beneficially owned by the business.
Joint venture and co-ownership structures where one participant holds an asset for the group.
We would emphasize two things about this list. Whether any specific arrangement is a bare trust, and whether it is also an express trust under the narrowed test, is a legal question that depends on facts and documentation this article cannot assess. And the express trust narrowing may help some of these: a formally documented nominee agreement is arguably more likely to constitute an express trust than an informal arrangement, which cuts against the business case rather than for it. The point is not that all of these must file. It is that these are the arrangements where the analysis is now required, and where the headline relief does not reach.
The Identification Problem
The obstacle that persists regardless of how generous the exemptions are.
You cannot apply an exemption to an arrangement you have not identified. The CRA's own deferrals were granted partly because of the complexity in determining whether certain arrangements were bare trusts[2], and that complexity has not been legislated away; it has been narrowed at the margins.
For a business, identification means a deliberate exercise: reviewing who holds legal title to each significant asset, and asking in each case whether the registered owner is also the beneficial owner. Where they differ, an arrangement exists that needs characterizing. The places this most often surfaces are real property titles, share registers, vehicle and equipment registrations, and bank or investment accounts opened in an individual's name for the business.
One useful framing from the commentary: the deferral gives individuals holding assets in bare trust extra time to identify such arrangements and prepare for future compliance[1]. That was the stated purpose of the delay. Three years of it have now elapsed, and for most businesses the identification exercise the delay was meant to enable has not been done.
The Legislative Status, Honestly
A caution that matters given this file's history.
Draft legislation was released in August 2024 and further amended in August 2025, and was not passed into law; draft legislation reflecting the most recent proposals was introduced in a legislative bill before the House of Commons in November 2025 but has yet to be passed into law as at that source's writing[2]. The CPABC commentary describes the August 2025 draft legislation as expected to be enacted later that year[3].
Meanwhile the CRA has stated that where the law has not yet been enacted but the CRA expects it to be, it will administer the rules consistently with the proposed amendments[6], and CRA guidance has assured practitioners that T3 return forms and instructions will reflect these changes, providing relief proactively in anticipation of Bill C-15's enactment[1].
Two readings follow, and a business should hold both. The exemptions can be relied on for practical purposes because the CRA has committed to administering them, which is a meaningful commitment. But they are proposals until enacted, and this is a file where the government has changed course repeatedly, so a business should verify the enacted position closer to the filing rather than treat a mid-2026 summary as final. We have not established whether Bill C-15's trust provisions have since received Royal Assent, and readers should check.
Schedule 15 And Listed Trusts
A distinction that determines how much work a filing obligation actually creates.
The obligation has two components: the T3 return itself, and Schedule 15, the beneficial ownership information schedule. While they may be required to file a T3 return in certain circumstances, listed trusts are exempt from the enhanced beneficial ownership reporting requirement, meaning Schedule 15[3].
Schedule 15 is where the substantive disclosure sits: identifying information for each trustee, beneficiary, settlor and controlling person. For a business arrangement with multiple beneficial owners, assembling that is a real exercise requiring information from parties who may not expect to provide it. Establishing early whether an arrangement is a listed trust, and therefore whether Schedule 15 is required, materially changes the preparation timeline.
A Worked Case: The Nominee Corporation
A Canadian real estate joint venture in which a single-purpose nominee corporation holds legal title to a commercial property, with beneficial ownership divided among three investors under a co-ownership agreement. The reconstruction below illustrates the analysis rather than reporting a specific engagement.
The nominee corporation has no employees, no operations, and no authority to deal with the property except on the direction of the beneficial owners. It exists because holding title in one name simplifies registration and financing. On the CRA's characterization, a trustee with no significant powers or responsibilities, unable to act without instruction, functioning only to hold legal title[4], this looks squarely like a bare trust.
Run the exemptions. The property is worth several million dollars, so the $50,000 threshold does not assist. It is not a joint spousal account. It is not a parent on title for a child's principal residence. It has existed for years, so the three-month rule does not apply. The remaining question is whether the arrangement constitutes an express trust under the narrowed test, and here the formal co-ownership and nominee agreements arguably make that more likely rather than less.
If a filing is required, Schedule 15 would call for identifying information on the trustee corporation and each beneficial owner, and where an investor is itself an entity, potentially its controlling persons. Assembling that from three investor groups is not a task to begin in March 2027. The three investors also need to agree who is responsible for the filing, which is a conversation the co-ownership agreement may not address.
What To Do Before Year End
Run the identification exercise now. For every significant asset, ask whether the registered legal owner is the beneficial owner. Real property titles, share registers, equipment and vehicle registrations, and accounts held in an individual's name for the business are where divergence shows up.
Test each identified arrangement against the exemptions in order. Under $50,000 in total assets throughout the year, with no asset-type restriction. Joint spousal account. Parent on title for a child's principal residence. In existence less than three months. Then the express trust question, which needs legal input.
Do not assume the consumer relief covers your business structure. The three headline exemptions address personal and family arrangements. Nominee corporations and share-holding arrangements are not among them.
Establish whether Schedule 15 applies. The beneficial ownership schedule, not the return itself, is where the work is, and gathering identifying information from co-investors takes time you should allocate deliberately.
Decide who files. In multi-party arrangements, responsibility for the filing is frequently unaddressed in the underlying agreements, and the time to settle it is before the obligation crystallizes.
Verify the enacted position later in the year. The CRA has committed to administering consistently with the proposals, but this is a file with a history of change, and the position should be confirmed rather than assumed from any summary written mid-year.
The Lesson In The Whiplash
A closing observation about how to handle deferred requirements generally, because this will not be the last one.
The rational response to three consecutive deferrals is to conclude that a fourth is likely, and many businesses did exactly that. The problem is asymmetry. If you prepare and the requirement is deferred again, you have done an identification exercise that has independent value: knowing who beneficially owns your assets is useful for financing, succession, insurance and dispute avoidance regardless of any tax filing. If you do not prepare and the requirement takes effect, you are assembling multi-party beneficial ownership information under deadline.
The costs are not symmetric, and neither is the information. The deferrals were explicitly granted to allow identification work to happen[1]. Treating them instead as evidence that no work was needed inverted their purpose, which is understandable given how the March 2024 episode was handled, and is nonetheless the position a fair number of businesses now find themselves in.
The Limits Of This Analysis
Several caveats matter, and unusually so here. This is a file that has changed at least four times, some proposals remain unenacted as at the sources reviewed, and we have not established whether Bill C-15's trust provisions have since received Royal Assent; verify the current position before relying on any statement here. Whether a particular arrangement is a bare trust, and whether it is also an express trust, is a fact-specific legal determination that the CRA itself says may warrant legal counsel, and this article cannot assess any specific arrangement. The list of business arrangements likely to remain in scope is our own analysis, not a finding in the cited sources, and the express trust narrowing may affect individual cases in either direction. This article does not address penalties, filing mechanics, the full list of exempt trust categories, or provincial considerations. Nothing here is tax or legal advice; a business with arrangements of this kind should engage Canadian tax and legal advisors well before the 2026 year end.
Frequently Asked Questions
When do bare trusts actually have to start filing?
What are the new exemptions?
My business uses a nominee corporation. Am I covered by the relief?
What is the express trust change?
Can I rely on exemptions that are not yet law?
What is Schedule 15 and does it always apply?
References
- Hull & Hull LLP. (2026, March 2). Relief From Canada's Expanded Trust Reporting Rules ─ What Trustees Need To Know For 2025-2026, on the December 31, 2026 start, the $50,000 exemption without asset-type restriction, effective dates and CRA February 2026 guidance. hullandhull.com/2026/03/relief-from-canadas-expanded-trust-reporting-rules
- Scotia Wealth Management. (2026, February 4). Trust Reporting Requirements For Bare Trusts ─ What You Need To Know For 2025 And 2026, on the draft legislation history, the November 2025 budget confirmation and legislative status. enrichedthinking.scotiawealthmanagement.com/2026/02/04/trust-reporting-requirements-for-bare-trusts
- CPABC. (2025, November 20). Understanding New T3 Trust Reporting Requirements: What CPAs Need To Know For 2025, on the 2018 budget origin, the express trust narrowing and listed trusts' Schedule 15 exemption. bccpa.ca/news-events/cpabc-newsroom/2025/november/understanding-new-t3-trust-reporting-requirements
- Advocis. (2026, March 17). New Trust Reporting Rules Explained, on the CRA's bare trust characterization, the filing requirement absent tax payable, and the three-month rule. advocis.ca/new-trust-reporting-rules-explained
- Canada Revenue Agency. (2024, March 28). New ─ Bare Trusts Are Exempt From Trust Reporting Requirements For 2023. Government of Canada. canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2024/bare-trusts-exempt-from-trust-reporting-requirements-2023.html
- Insight Accounting CPA. (2026, July). Bare Trust T3 Filing In Canada (2026) ─ Schedule 15 Reporting, Exemptions, And Penalty Risk, on the October 29, 2024 extension, Bill C-15's proposed exemptions and the CRA's administrative posture pending enactment. insightscpa.ca/bare-trust-t3-filing-canada-2026
- CIBC. Enhanced Trust Reporting Rules (Updated), on the March 28, 2024 announcement, prior filings made before it, the December 16, 2025 announcement, the definition of the covered arrangement and the list of other exempt trusts. cibc.com/.../enhanced-trust-reporting-en.pdf
- CBC News. Government Granting Another Exemption On Bare Trust Filing Requirements, reporting the 2024 tax year exemption. cbc.ca/1.7368404
This article discusses Canadian trust reporting rules and is provided for general informational purposes. It is not tax or legal advice. Several measures described remain proposals as at the sources reviewed and this file has changed repeatedly; verify the enacted position. Whether an arrangement is a bare trust is fact-specific and the CRA itself suggests legal counsel where there is doubt.