Important update — bare trusts (CRA, March 28, 2024)
On March 28, 2024, the Canada Revenue Agency (CRA) announced that bare trusts are exempt from filing a T3 Income Tax and Information Return (including Schedule 15) for the 2023 tax year unless the CRA specifically requests a filing. The CRA indicated this was to address unintended compliance burden while trust reporting rules bed in, and that it would continue to work with the Department of Finance on further guidance. Watch CRA news releases for later years and for any extension or change to this administrative approach—your obligation can change with new announcements.
Background — reporting from December 31, 2023
Starting with rules tied to December 31, 2023, Canada significantly expanded which trusts must file annually and what must be disclosed (including beneficial ownership information on Schedule 15 where applicable). Previously, many trusts with little or no income and no distributions might not have filed annually; many more arrangements may now be within the filing regime.
Who may need to file
- Many trusts that were previously non-filing may need a T3 for the first time, depending on facts and exemptions.
- Not every trust is caught—exemptions exist (for example, certain trusts that hold no more than $50,000 in specified prescribed assets throughout the year, graduated rate estates (GREs) in respect of their status, and other categories defined in law and CRA guidance).
Always confirm current rules on Canada.ca — Trusts and with your advisor.
Bare trusts — why clients get confused
CRA materials and practice have emphasized bare trust arrangements—where legal title and beneficial ownership diverge. People sometimes do not realize a bare trust exists. Common individual examples include:
- A parent on title of a child’s home without beneficial ownership, to assist with financing.
- A parent or grandparent holding an investment or bank account in trust for a child or grandchild.
- One spouse on title while the other is at least a partial beneficial owner.
Estate planning examples can include a child on title for probate or administration convenience, or a child on a parent’s accounts to assist after death. Business contexts can include nominee corporations, partnership bank accounts, joint ventures, or cost-sharing structures.
Note: Bare trust identification for T3/Schedule 15 is separate from, and not the same as, the Underused Housing Tax (UHT) or other taxes. If you hold residential property through a structure that might be a bare trust, you may have multiple reporting threads — get professional advice.
What you should do
- Determine whether you have a trust relationship (including bare trust) that requires T3 filing and Schedule 15 for your tax year.
- Keep records of beneficial owners and settlor/trustee roles so filings are complete and timely.
- If you relied on March 28, 2024 administrative relief for 2023 bare trusts, re-assess each subsequent year under updated CRA guidance.
Legacy hub note: If you arrived here from an older article, Trust Update (December 31) is now treated as archived historical context only — use this page for current reporting themes.
This post has been prepared for general information purposes. It is not advice. The information presented may not fit your unique situation. Please consult one of our trusted business advisors at RHN CPA for further clarification and interpretation of your circumstances.
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