Bare trust reporting: do you need to file?

What is a bare trust?

A bare trust exists when one person’s name is on the title of a property or account, but it really belongs to someone else. It often comes up with estate planning, family bank accounts, and farmland that has been moved into a corporation.

These arrangements have always been considered trusts. In the past they didn’t have to file a tax return. Now, many do.

Why this matters to you

The CRA puts the responsibility on each person to identify their own bare trust. We can’t see these arrangements on your regular tax return, so we need you to tell us.

If a T3 return is needed and isn’t filed on time, the CRA can charge a penalty of $25 for each day it’s late, up to $2,500.

Words to know

Legal title

Whose name is listed as the owner, such as on a land title or at the bank.

Trustee

The person or company whose name is on the title, holding it for someone else.

Beneficiary

The person or company the property really belongs to.

Settlor

The person or company who put the property into the arrangement.

T3 return

The tax return the CRA uses for trusts.

Not sure?

Talk to a member of our Technical Tax Team. You can also choose “I’m not sure” in the check, and we’ll follow up with you.