T3 Filing for Bare Trusts in 2026: Who Must File and Who Is Exempt?

For taxation years ending on or after December 31, 2026, certain bare trust arrangements must file a T3 return. For a December 31, 2026 year end, that return is due March 31, 2027.

This is a change. Bare trusts were not required to file for 2023, and the Canada Revenue Agency confirmed the same for taxation years ending on or after December 31, 2024 and before December 31, 2026.

The legislation contains several exceptions, and a number of common family arrangements may fall within one. Each exception carries conditions that must be satisfied — in most cases throughout the entire year.

Do you have to file a T3 for 2026? Start here

These questions narrow the issue. They do not settle it, because each exception below has conditions that have to be checked against the specific facts.

1. Does someone hold legal title to property for another person’s benefit? If the person on title is also the person who benefits, and no one else is involved, the arrangement described in these rules does not arise.

2. Is the title-holder essentially acting as an agent for the person who benefits? This is the statutory test. Without it, the deeming rule does not apply.

3. Is everyone on title also a beneficiary, and is every beneficiary also on title? If so, an exception is likely available — see exception (a).

4. Is the property a home, and is everyone on title an individual related to the others? If it would qualify as a principal residence for at least one of them, exception (b) may apply. The conditions are specific and are set out below.

5. If none of these resolve the question, a filing obligation may exist, and the arrangement is worth reviewing with a professional well before March 31, 2027.

What changed for the 2026 tax year

The earlier relief has ended

Bare trusts were brought within the expanded trust reporting rules and then repeatedly released from them. Per the CRA’s guidance on the enhanced reporting rules, they were not required to file for 2023, and were not subject to the trust reporting rules for taxation years ending on or after December 31, 2024 and before December 31, 2026. That relief does not extend to 2026.

The legislation does not use the term “bare trust”

This explains why searching the Income Tax Act for “bare trust” returns nothing, and why advisers describe the rule in different terms.

Bill C-15, the Budget 2025 Implementation Act, No. 1, received Royal Assent on March 26, 2026. Its trust provisions do not use the phrase “bare trust” or “reportable bare trust.” Those are the CRA’s administrative labels and the profession’s shorthand.

What the legislation enacts is a deeming rule. New subsection 150(1.3) of the Income Tax Act is headed “Deemed trust.” It treats an arrangement that would not otherwise be a trust for tax purposes as one, for the purposes of the filing rules. The exceptions sit in subsection 150(1.31), headed “Deemed trust — exceptions.”

One practical consequence: Bill C-15 repealed the previous subsection 150(1.3) and enacted a different provision in its place. A citation to “150(1.3)” that does not identify which version may be describing superseded text.

When the new rule applies

Bill C-15 phases its trust amendments in over three years. The provisions creating the deemed trust rule and its exceptions apply, in the words of the Act, to “taxation years that end after December 30, 2026.” A December 31, 2026 year end is the first year affected.

Does subsection 150(1.3) apply to the arrangement?

The two conditions

The deeming rule applies to an express trust that would not otherwise be considered a trust under the Act, where both of the following hold:

• one or more persons — described in the legislation as a “legal owner” — have legal ownership of property held “for the use of, or benefit of” one or more other persons or partnerships; and

• the legal owner “can reasonably be considered to act as agent” for those persons or partnerships.

Both conditions must be met. Legal ownership alone is not sufficient; the agency element is what distinguishes these arrangements from ordinary co-ownership.

Who is treated as trustee, and who as beneficiary

Where the rule applies, each legal owner is considered a trustee, and each person or partnership having the use or benefit of the property is considered a beneficiary. Where the trust is required to report beneficial ownership information, these are the roles that determine whose details are reported.

An open question on trusts arising by operation of law

The deeming rule is drafted to apply to an express trust that would not otherwise be a trust under the Act. Whether arrangements arising by operation of law rather than by intention — a resulting trust, for example — fall within that wording is not resolved on the face of the legislation, and the CRA has not addressed it in published guidance. Anyone whose position depends on this distinction should obtain a professional opinion.

The eight exceptions in subsection 150(1.31)

Subsection 150(1.3) does not apply to a trust for a taxation year where any one of the following is met.

(a) Everyone on title is also a beneficiary

Applies where every person considered a beneficiary is also a legal owner of the property, and there are no legal owners who are not beneficiaries. The requirement runs in both directions.

(b) Related individuals holding a principal residence

Applies where the legal owners are individuals who are related persons, and the property is real property that would be the principal residence of one or more of the legal owners for the year, had they designated it under the Act’s principal residence definition.

This exception is narrower than it first appears, and it is worth reading the conditions closely:

• Every legal owner must be an individual. If a corporation holds any part of the legal title, the exception is not available.

• The legal owners must be related to each other, as that term is defined for these rules (see below).

• The property must be capable of being a principal residence of one of the legal owners for that year. A property held as a rental or an investment generally will not meet this.

• The condition is tested for the year, so a change in ownership or in the use of the property part-way through 2026 may affect the analysis.

A parent added to an adult child’s title where the home is the child’s principal residence is a common arrangement that may fall within this exception. It does not follow that every parent-on-title situation is automatically exempt — the outcome depends on each of the conditions above.

(c) Property held for a spouse or common-law partner

Applies where the legal owner is an individual and the property is real property held for the use or benefit of the legal owner’s spouse or common-law partner during the year, and would be the legal owner’s principal residence for the year if designated.

(d) Property held for a partnership that files its own return

Applies where the property is held throughout the year solely for a partnership, each legal owner is a partner, and a member of the partnership is required to file a partnership information return covering a fiscal period that includes December 31 of the taxation year.

(e) Property held under a court order

Applies where the legal owner holds the property “as required by an order of a court.”

(f) and (g) Resource-sector and public-sector arrangements

Two further exceptions cover specialised structures, and neither is likely to apply to an individual or an owner-managed business. Exception (f) covers Canadian resource property held for corporations listed on a designated stock exchange, corporations they control, or partnerships whose majority-interest partners are such corporations. Exception (g) covers property held exclusively for persons exempt from tax under subsection 149(1), where each legal owner is such a person and the property consists solely of federal or provincial government funds.

(h) Registered securities dealers and regulated trust companies

Applies where the trustee is a registered securities dealer acting in that capacity, or a regulated trust company acting as an investment entity, provided the only property held falls within a defined list of financial assets and an information return is issued covering all of the trust’s income and gains to all beneficiaries. Whether a particular brokerage or nominee account comes within this exception depends on every one of those statutory conditions being satisfied, not on the account type alone.

How “related” is defined for these rules

A separate provision widens the ordinary meaning. Subsection 150(1.32) states that for the purposes of section 150, a related person “includes an aunt, uncle, niece and nephew,” and that “a person is related to himself or herself.”

The general definition of related persons in the Income Tax Act does not extend to aunts, uncles, nieces and nephews. For these filing rules it does, which widens the range of family arrangements capable of meeting exception (b).

A second list of exceptions, in subsection 150(1.2)

Because subsection 150(1.3) deems the arrangement to be a trust for filing purposes, the general exceptions available to all trusts under subsection 150(1.2) may also apply. These are separate tests in a different subsection. Treating the two lists as one is a common error.

Subsection 150(1.2) sets out a list of trust categories — the CRA refers to them as listed trusts — running through paragraphs (a) to (r). Size and duration thresholds are only part of that list. It also covers specified types of trust regardless of their size, including graduated rate estates, trusts required to hold funds under professional conduct rules, certain pension and retirement arrangements, trusts established to comply with a federal or provincial statute, and employee ownership trusts.

The thresholds most often relevant to a family arrangement are:

• In existence less than three months. A trust that “had been in existence for less than three months” at the end of the year.

• Assets under $50,000 throughout the year. A trust that “holds assets with a total fair market value that does not exceed $50,000 throughout the year.” The word “throughout” matters: a value above the threshold at any point in the year takes the arrangement outside this exception.

• The $250,000 related-individual exception. Requires that each trustee is an individual; each beneficiary is an individual (other than a trust) related to each trustee, or the graduated rate estate of such an individual; and the total fair market value of the property does not exceed $250,000 throughout the year, with the only assets held falling within a defined list — money and deposits at a Canadian financial institution, guaranteed investment certificates from a Canadian bank, trust company or credit union, listed securities, mutual fund shares and units, personal-use property, and certain others.

The two lists ask different questions, and an arrangement may fail one while still being released by the other.

A note for anyone comparing sources: the wording of several 150(1.2) paragraphs was itself amended with effect for taxation years ending after December 30, 2025. A 2026 taxation year uses the amended text, and some published commentary still quotes the earlier version.

Three common situations

These are generalised patterns rather than client situations, and each depends on its own facts.

A parent on an adult child’s title. Where every owner is an individual, the owners are related, and the home would be the child’s principal residence, exception (b) may apply. Where a corporation is on title, or the property is a rental, the analysis changes.

A nominee corporation holding title to a rental property. A corporation holding bare legal title for beneficial owners is the kind of arrangement the deeming rule contemplates. The residential exceptions in (b) and (c) are not available where a corporation is the legal owner or the property is a rental, so the analysis turns on whether any other exception is met — exception (d) may assist where the beneficial owner is a partnership that already files an information return.

A joint bank account or an in-trust-for account with a family member. Whether the deeming rule applies depends on whether the account holder is genuinely acting as agent for someone else. Where it does apply, the $50,000 threshold in subsection 150(1.2) — and in some cases the $250,000 related-individual exception — may release the account, provided the limit is respected throughout the year.

Filing: what and when

The CRA’s rule is that “the T3 return must be filed no later than 90 days after the trust’s tax year-end.” For a December 31, 2026 year end, that is March 31, 2027, which falls on a Wednesday, so no weekend extension applies. Where a due date does fall on a Saturday, Sunday or public holiday recognised by the CRA, a return received or postmarked on the next business day is treated as on time.

Schedule 15 does not accompany every T3 return. Per CRA guidance, trusts that are required to file a T3 return, other than listed trusts, must include specified information about each reportable entity on Schedule 15, Beneficial Ownership Information of a Trust. Listed trusts — the categories in paragraphs 150(1.2)(a) to (r) — are not required to include Schedule 15 with a T3 return. So where a reportable bare trust has a filing obligation and is not within one of those categories, Schedule 15 forms part of the filing; where it is a listed trust, it does not.

[VERIFY BEFORE PUBLICATION] Confirm the Schedule 15 form for the 2026 tax year is published and that this description matches it. If the 2026 form has not been released, state that it is pending rather than describing the prior year’s version.

Preparing a T3 return alongside a trust’s other obligations is part of the firm’s CRA filing services.

Penalties

Two penalty regimes are relevant. The first is the ordinary late-filing penalty for a T3 return, which can apply whether or not the trust owes tax. The second is a more serious penalty that may apply where a failure to file is made knowingly, or in circumstances amounting to gross negligence.

Bill C-15 adjusted which trusts the second penalty reaches, tying it to trusts not covered by the exceptions in subsection 150(1.2), with effect for taxation years ending after December 30, 2025.

[VERIFY BEFORE PUBLICATION — figures deliberately omitted from the body] The CRA’s enhanced-reporting FAQ states a late-filing penalty of $25 a day, minimum $100 and maximum $2,500, and, for trusts that are not listed trusts, a gross negligence penalty of the greater of $2,500 and 5% of the highest fair market value of property held in the year. These are recorded here for the reviewer only and are not stated in the article. Still to confirm before any figure is published: (i) both amounts read from the consolidated Income Tax Act at ss.162(7) and 163(5) — the Justice Laws site was unreachable throughout drafting; and (ii) which subsection carries the gross negligence penalty for a Schedule 15 omission, as secondary commentary is inconsistent between 163(5) and a proposed 163(5.1).

The CRA has described its approach to these rules as education-first. That is an administrative position rather than a statutory limit.

What the CRA has not yet published

The CRA’s page on the enhanced reporting rules states that further information will be added in advance of the T3 filing season for taxation years ending December 31, 2026. Until that guidance is published, the exceptions have to be read from the enacted legislation rather than from an administrative summary. The treatment of trusts arising by operation of law, noted above, also remains unresolved.

[VERIFY BEFORE PUBLICATION] Re-check the CRA FAQ on the publication date. If the filing-season guidance has been published, this section and the Schedule 15 description must be reconciled with it before the article goes live.

This article will be updated when the CRA publishes its guidance.

Frequently asked questions

What happens if an arrangement is set up or ends part-way through 2026? Several exceptions are tested on conditions being met throughout the year, including the $50,000 and $250,000 thresholds. A change in ownership, property use or asset value during the year can affect whether an exception remains available.

If an exception applies, is there anything to do? No return is required under the deeming rule. As a practical matter, a trustee relying on an exception should keep records supporting the exception relied upon — which one applies and the facts behind it — in case the CRA requests them.

Is this the same as the reporting rules for a family trust? No. A family trust is a trust in the ordinary sense and has its own filing obligations. These rules address arrangements that would not otherwise be treated as trusts at all.

What if it is unclear whether the title-holder is acting as an agent? That is the condition the whole analysis turns on, and it is fact-specific. Where it is genuinely unclear, it should be reviewed professionally rather than assumed in either direction.

Confirming which side of the line an arrangement falls on

The more useful question than “who files” is usually “which exception applies here, and what should be kept on file to support it.”

GTA Accounting can review an arrangement, confirm whether a 2026 filing obligation arises and, where it does not, document the exception relied on. Where a filing is required, the firm prepares the T3 return and Schedule 15 where it forms part of the filing.