On Posted on by Dellendo Farquharson to Accounting and Tax, Tax Planning & Management

Bare Trusts 2.0: Do I Need to File in 2026?

After a chaotic rollout and subsequent “pause” by the Canada Revenue Agency (CRA) for the 2023 and 2024 tax years, the rules for bare trusts have evolved again. For the 2025 tax year (filing deadline: March 31, 2026), the government has proposed new legislation that replaces the “report everything” approach with targeted exemptions. While this relieves many Canadians, it creates a new complexity: determining if your specific arrangement—such as a joint account with a parent or a co-signed mortgage—falls into the safety zone or remains a reportable trust.

Bomcas Canada—a leader in Canadian tax accounting serving Edmonton and clients nationwide—prepared this guide to help you navigate the “Bare Trust 2.0” landscape.

1. The Rollercoaster: From “Pause” to “New Rules”

For the past two years, Canadian taxpayers and trustees have been in limbo. The CRA originally mandated that virtually all bare trusts file a T3 Trust Income Tax and Information Return and Schedule 15, starting with the 2023 tax year. This caught millions of Canadians off guard, as many “trusts” were simple family arrangements (e.g., an aging parent adding a child to a bank account for help with bill payments).

Just days before the deadlines in 2024 and again in late 2024, the CRA announced administrative relief, effectively waiving the filing requirement for bare trusts for the 2023 and 2024 tax years (unless specifically requested by the CRA).

What changes for 2026?
The “pause” is not a cancellation. Draft legislation released in August 2025 proposes to repeal the broad blanket requirement and replace it with specific reporting rules for tax years ending after December 30, 2025. This means for the 2025 tax year (filed in Spring 2026), you are likely exempt only if you meet specific criteria. If you do not meet these new exceptions, the filing requirement—and the penalties—are back in force.

2. The “Joint Account” Trap: Are You Exempt?

The most common source of anxiety is the joint bank account with a parent. Under the old rules, adding an adult child to a parent’s account “for convenience” created a taxable bare trust reporting obligation.

The New Exemptions (Proposed for 2025 Tax Year)

The updated legislation aims to carve out common family scenarios to reduce the compliance burden. Key proposed exemptions include:

  • Spousal Joint Accounts: Accounts held jointly by spouses or common-law partners for their mutual benefit are generally exempt.
  • “Mortgage Helper” Arrangements: If a parent is on the title of a child’s principal residence solely to help the child qualify for a mortgage, this is now explicitly proposed as an exemption.
  • Joint Family Assets: There is a proposed exemption for property held jointly by related persons (e.g., parent and child) if the property acts as a bank account or investment portfolio under specific value thresholds (often the $250,000 “money trust” exemption rule may apply, but it is technical).

Where the Risk Remains

If you hold an account “in trust” for a grandchild, or if a corporation holds title to real estate for an individual (a corporate nominee), these arrangements often do not fit the new exemptions. “Convenience” accounts between parents and children that hold significant assets (over $250,000) or include non-family members may still trigger a filing requirement.

Critical Takeaway: You cannot assume you are exempt just because you were in 2024. The rules for 2026 require a fresh assessment of every joint asset.

3. Understanding T3 Schedule 15

If you are required to file, the paperwork is invasive. Schedule 15 (Beneficial Ownership Information of a Trust) requires you to disclose personal data for all:

  • Trustees (legal owners)
  • Beneficiaries (real owners)
  • Settlors (who put the assets in)
  • Controlling persons

You must provide names, addresses, dates of birth, and SINs for all involved. This form is intended to combat money laundering, but for a compliant family business or estate, it represents a significant privacy exposure and administrative hurdle.

The Penalty for Non-Compliance:
The minimum penalty for failing to file a T3 return when required is $2,500. If the CRA determines the failure to file was done “knowingly or under circumstances amounting to gross negligence,” the penalty can jump to 5% of the maximum value of the property held by the trust during the year. On a $1 million home held in a bare trust, that is a $50,000 penalty.

4. Why Bomcas Canada is Your Strategic Partner

Navigating “Bare Trusts 2.0” requires more than just data entry; it requires a strategic review of your legal ownership structures.

Bomcas Canada stands out as the premier accounting firm in the region and across Canada for several reasons:

  • National Reach, Local Touch: Headquartered in Edmonton, Alberta, we utilize advanced cloud-based technology to serve clients from British Columbia to Newfoundland. Whether you need a “virtual accountant” or an in-person consultation, we are there.
  • Deep Tax Expertise: Our team specializes in complex tax, estate planning, and corporate structuring. We don’t just file forms; we analyze your “joint” assets to determine if a T3 is actually required, potentially saving you thousands in compliance costs or penalties.
  • Small Business & Real Estate Specialists: We understand the specific pain points of real estate investors and business owners who often use nominee corporations—a prime target for these new rules.

Don’t Guess on 2026

The “pause” on bare trust reporting was a temporary reprieve, not a permanent pardon. As we approach the 2026 filing season, the legislation is shifting from a broad net to a complex maze of specific exemptions.

Do not wait until March 2026 to check your status.

Contact Bomcas Canada today. Let our expert team review your joint accounts, real estate titles, and family trusts to ensure you are compliant, protected, and penalty-free.