Bare Trust Reporting Returns for December 31, 2026 Year Ends

The rule comes back smaller. As the rule stands, bare trusts return to the T3 reporting rules for tax years ending on or after December 31, 2026, after three filing seasons in which they were exempt. First returns would fall due March 31, 2027.

It catches nominee and agency arrangements owner-managers set up without ever calling them a trust.

Three years of exemptions

The Canada Revenue Agency has exempted bare trusts from filing since the expanded rules took effect. Those rules, a T3 return plus Schedule 15 naming trustees, settlors, beneficiaries and controlling persons, apply for tax years ending on or after December 31, 2023.

For 2023, CRA said it would not require a bare trust to file "unless the CRA makes a direct request." Its page then took the next two years out entirely: bare trusts "are not subject to the trust reporting rules" for taxation years ending on or after December 31, 2024 and before December 31, 2026.

The March 5, 2026 tax tip was softer for 2025. CRA there "does not expect bare trusts to file a T3 return including Beneficial Ownership Information of a Trust (Schedule 15) for taxation years ending in 2025."

How the revived rule was narrowed

The narrowing rode Bill C-15, the Budget 2025 Implementation Act, No. 1, which received Royal Assent on March 26, 2026. CRA's page now reads: "Certain bare trusts are subject to the trust reporting rules. These are described in subsection 150(1.3), subject to several exceptions described in subsection 150(1.31)." CRA calls them reportable bare trusts.

Subsection 150(1.3) of the Income Tax Act describes an arrangement where a legal owner holds property "for the use of, or benefit of" another person and "can reasonably be considered to act as agent" for them. The legal owner is treated as the trustee. That is title in one name and benefit in another.

Subsection 150(1.31) adds eight exceptions, among them arrangements where the beneficiaries are also the only legal owners and related individuals holding a principal residence.

What a missed filing costs

The deadline is 90 days after the trust's tax year end. CRA worked that for the 2025 year end, due March 31, 2026. A December 31, 2026 year end therefore lands on March 31, 2027, a date CRA has not itself published.

The penalties sit in the Income Tax Act, and CRA's trust reporting page states both. Under subsection 162(7), the ordinary failure-to-file penalty runs at "$25 a day for the period that the failure continues, from a minimum of $100 to a maximum of $2,500."

The second one is the problem. Under subsections 163(5) and (6), a gross negligence penalty is "the greater of $2,500 and 5% of the highest amount of the fair market value of all the property held by the trust at any time in the year."

CRA's page says only that "More information will be added in advance of the T3 return filing season for trusts with taxation years ending on December 31, 2026." No statement since the March 26 Royal Assent confirms or further defers that start.