Does the Bare Trust Filing Requirement Apply to You?

In a bare trust arrangement, the legal title holder is separate from the beneficial owner.

The Canada Revenue Agency defines a bare trust arrangement as “an arrangement under which [the trustee] can reasonably be considered to act as agent for all the beneficiaries under the trust with respect to all dealings with all of the trust’s property.” This is a very broad definition and can encompass many different arrangements.

Examples include (but are not limited to):

Property held by a nominee company,
Property which someone is on legal title for the purpose of estate planning,
and in-trust-for accounts.

Common scenarios include:

Adding adult children to legal title on a property while the parents retain beneficial ownership
Adding adult children as joint legal owners (but not beneficial owners) for investment or cash accounts for estate planning purposes.

Note, there is an exemption to filing for Trusts that own less than $50,000 throughout the taxation year of cash, government bonds, or listed securities.

Bare Trust Tax Filing and Deadline

The T3 Trust Income Tax and Information Return and all relevant schedules were due originally due for filing no later than 90 days after December 31, 2023.

On March 28, 2024 at approximately 2:30pm EST, the Canada Revenue Agency announced that they will not require bare trusts to file a T3 Income Tax and Information Return (T3 return), including Schedule 15 (Beneficial Ownership Information of a Trust), for the 2023 tax year, unless the CRA makes a direct request for these filings.

These returns were originally due on April 2nd, though the CRA had previously announced that they would not be charging the late filing penalties.

This announcement does not apply to Family, Alter Ego, and other trusts. These trusts still have a filing obligation which is still due on April 2nd.

This is great news for those taxpayers that have bare trusts or had uncertainty around filing for various situations. However, Numberra CPA had already prepared and filed numerous of these T3 Returns for our clients on the basis that legislation passed in December 2022 was law. If you're a client, and if there's any information we need from you, we'll be in touch with you directly.