Recent federal proposals aim to ease Canada’s new trust reporting rules, which were set to significantly expand the annual T3 filing and beneficial ownership disclosure requirements for trusts (including many bare trusts) starting with 2023 year-ends. Bill C-15 (tabled in November 2025) and updated guidance from the Canada Revenue Agency outline key relief measures for the 2024–2025 tax years, pending formal enactment:
- Bare Trusts – Filing Deferred to 2026: CRA will not require “bare trusts” – arrangements where a person holds property as a nominee or agent for others – to file T3 returns (or Schedule 15 beneficial ownership reporting) for the 2023, 2024, or 2025 tax years. Mandatory filing for bare trusts begins with taxation years ending on or after December 31, 2026, as confirmed by a CRA announcement on Dec. 16, 2025. This deferral gives individuals holding assets in bare trust (e.g. in-trust-for accounts for children, or real estate held jointly for estate planning) extra time to identify such arrangements and prepare for future compliance.
- Trusts with ≤ $50,000 in Assets: Any trust holding no more than $50,000 in total assets throughout a year will be exempt from filing a T3 return under the proposals. No asset-type restrictions apply, eliminating the prior rule that only certain types of assets (like cash or government securities) qualified for the $50,000 exemption. This expanded small-trust exemption means many low-value or inactive trusts will no longer need to file annual returns starting with the 2025 tax year.
- “Family” Trusts with ≤ $250,000 in Low-Risk Assets: A trust will be exempt from filing (and/or from providing detailed Schedule 15 information) if its total assets’ fair market value does not exceed $250,000 throughout the year, all trustees are individuals, and all beneficiaries are individuals related to each trustee. In addition, to qualify, the trust’s assets can only include certain low-risk asset types: for example, cash or bank-issued GICs, rights to income from those GICs, and specified exempt life insurance policies (valued at their cash-surrender value). This carve-out is intended to cover many common family trusts that hold modest investment portfolios or personal-use assets. Note: Proposed changes also expand the definition of “related persons” (for these rules) to include aunts, uncles, nieces, and nephews, broadening the scope of who counts as a related beneficiary for these exemptions.
- Client Trust Accounts (Cash ≤ $250,000): Trust accounts held under professional rules (e.g. lawyers’ or accountants’ trust accounts) will be exempt, provided they hold only money (cash) and the total value does not exceed $250,000 throughout the year. This extends existing relief (previously limited to pooled “general” trust accounts) to smaller client-specific trust accounts often used by professionals to hold funds on behalf of clients.
- Trusts Established Under Statute: Trusts created to comply with federal or provincial law for specific purposes – such as bankruptcy estates or guardianship trusts – are exempt from the new filing and disclosure rules. These “statutory trusts” typically involve court-appointed or government-mandated trustees holding assets for a defined legal purpose and will not require a T3 return under the updated provisions.
- Short-Term Trusts: A trust that was in existence for less than three months during the year will not be subject to the enhanced reporting requirements. This exception aims to exclude brief or transitory trusts (e.g. an interim trust created and wound up within a single quarter) from burdensome reporting.
- Common Bare Trust Scenarios – Joint Ownership & Principal Residences: The proposals also explicitly exempt certain everyday arrangements that would otherwise be treated as “bare trusts”:
- If all beneficiaries of a property are also on legal title (and no titleholder is not a beneficiary), the arrangement is not considered a separate trust for T3 reporting. For example, a joint bank account where all co-owners share in its benefits would fall under this exception.
- If the legal owners of a property are all related individuals (e.g. parents and children, siblings, including proposed extension to aunts, uncles, nieces, and nephews) and the property is a principal residence (or could be one) of at least one legal owner, it is exempt. A typical case is a parent added to a child’s home title solely to assist with a mortgage; such an arrangement won’t trigger trust filings.
- If one spouse/common-law partner holds title to a home that is the couple’s shared principal residence, with the other partner as the sole beneficial owner, that arrangement is likewise exempt from trust reporting.
Effective Dates: Most of these exemptions would first apply to the 2025 taxation year (for returns due in spring 2026) if the proposals are enacted in time. Meanwhile, the bare trust deferral means no filings are expected for 2025 (with the first bare trust T3s due by March 2027, covering the 2026 year). The federal government confirmed in the 2025 Fall Economic Update that it intends to pass these measures to take effect as outlined. The CRA’s February 2026 guidance also assures practitioners that the 2025 T3 return forms and instructions will reflect these changes, providing relief proactively in anticipation of Bill C-15’s enactment. (If the legislation is delayed, the CRA has stated it will extend administrative relief accordingly.)
Bottom Line: Trustees and advisors should familiarize themselves with these proposed exemptions and deferrals, as they will significantly reduce filing burdens for many common trusts.
Despite these welcome changes, the rules remain complex and are not yet final. Trustees should continue to maintain thorough records of trust beneficiaries, settlors, and contributors, and be prepared to file when required. If in doubt, consult a tax professional to determine how these evolving requirements apply to your situation, especially as the 2025 and 2026 deadlines approach.
Disclaimer: This summary is for general informational purposes only and does not constitute tax advice. Consult a qualified accountant or tax advisor for personalized advice regarding trust reporting obligations.
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