CRA Correspondence and Response Deadlines

SEPTEMBER 16, 2026

After several years of uncertainty, the CRA has confirmed that the bare trust reporting rules will apply for the 2026 taxation year. This means that certain bare trusts will be required to file a T3 Trust Return by March 31, 2027. The filing requirement was postponed for the 2023, 2024, and 2025 taxation years, but that relief has now ended.

What is a bare trust?

A bare trust generally exists when one person holds legal title to property while another person is the true beneficial owner. Importantly, a bare trust can exist without a written agreement and without anyone intentionally creating a trust. As a result, many ordinary family and business arrangements may fall within these rules.

Common examples may include:

  • A parent or child added to title of a home for borrowing purposes.

  • Real estate held through a nominee corporation.

  • Bank or investment accounts held in one person's name for the benefit of a child, parent, or another family member.

This is not an exhaustive list. Many other family, business, and investment arrangements may also fall within the definition of a bare trust. If you are unsure whether an arrangement could be affected, please contact RMR LLP for assistance.

Some Good News

Not every bare trust arrangement needs to be reported. The legislation contains a number of exemptions. For example:

  • Jointly owned assets where all legal owners are also beneficial owners, such as many joint spousal accounts.

  • Property held in registered plans such as RRSPs, TFSAs, RESPs, RRIFs, and FHSAs.

  • Certain family arrangements involving residential real estate.

  • Certain arrangements where the fair market value of all property held by the trust does not exceed $50,000 at any time during the year.

  • Certain arrangements where the fair market value of all property held by the trust does not exceed $250,000 at any time during the year, all legal owners and beneficial owners are related individuals, and the property consists only of qualifying assets such as cash or publicly traded securities.

The $250,000 exemption is subject to a number of technical conditions and is not available where the arrangement holds certain assets, including private company shares, precious metals, commodities, or crypto-assets.

Determining whether an exemption applies requires a review of the specific facts. An arrangement that is exempt in one year may become reportable in a later year.

What Happens if You Don't File?

The penalties for failing to file a required return can be significant. The standard penalty is $25 per day, with a minimum penalty of $100 and a maximum penalty of $2,500.

Where the CRA determines that the failure to file was made knowingly or due to gross negligence, substantially higher penalties may apply. In these situations, the penalty can be the greater of $2,500 and 5% of the fair market value of the property held by the trust.

Given the potentially significant penalties, it is important to review any arrangements that could constitute a bare trust well in advance of the filing deadline.

What Should You Do?

We encourage you to consider whether:

  • You hold property on behalf of another person; or

  • Another person holds property on your behalf.

If either situation applies, please contact RMR LLP as soon as possible. Conducting the review early will provide sufficient time to determine whether a filing is required and to complete any necessary reporting before the March 31, 2027 deadline.

For a more detailed discussion of bare trusts, common situations that may give rise to a filing obligation, and examples of available exemptions, please refer to RMR LLP's article of August 21, 2024.

If you have questions about your specific circumstances, we would be pleased to assist.