Which Bare Trusts Are Exempt From the 2026 T3 Filing? The $50,000, Joint-Account, and Parent-on-Title Rules Explained

Reviewed by Bader A. Chowdry, CPA, CA, LPA on September 10, 2026

Almost every bare-trust conversation we have had since 2024 has started in the wrong place. Trustees ask when they have to file. For the overwhelming majority of Ontario families and owner-managers the more useful question is whether they ever have to file at all — because the exemptions do most of the work, and the ones people repeat to each other at the kitchen table are not always the ones actually written into the Income Tax Act.

The rules moved again this year. Section 150 of the Act was last amended by 2026, c. 3, s. 71, the amendments carried by Bill C-15, the Budget Implementation Act, 2025, No. 1. This article walks the exemptions that matter in practice: the $50,000 bare trust exemption, the joint-account position, the parent-on-title position, and the other carve-outs in ITA s.150(1.31) that quietly close a surprising number of files.

Does a bare trust have to file a T3 return for the 2026 tax year?

Some do. For taxation years ending on or after December 31, 2026, a bare-trust arrangement caught by ITA s.150(1.3) must file a T3 return with Schedule 15 unless an exception in ITA s.150(1.31) or a listed-trust exception in ITA s.150(1.2) applies. CRA calls the ones that still have to file reportable bare trusts. Nothing was due for 2024 or 2025.

The deeming rule itself is worth reading closely, because it is broader than the phrase “bare trust” suggests. ITA s.150(1.3) reaches any express trust under which one or more persons — the Act calls them legal owners — hold legal ownership of property for the use or benefit of someone else, and where the legal owner can reasonably be considered to act as agent for those persons or partnerships. Each legal owner is then treated as a trustee, and each person or partnership with the use or benefit of the property is treated as a beneficiary.

Note what is not in that test: there is no requirement that anyone signed anything, no requirement that the arrangement be called a trust, and no dollar floor. That is precisely why the exemptions carry so much weight. If you want the filing mechanics rather than the exemptions, our CRA trust reporting deadline guide covers the return itself, and our bare trust T3 filing guide covers Schedule 15 field by field.

What does the $50,000 exemption actually cover in 2026?

ITA s.150(1.2)(b) exempts a trust that holds assets with a total fair market value not exceeding $50,000 throughout the year. For taxation years ending on or after December 31, 2024, CRA confirms there is no longer any restriction on the type of assets held — the old money-and-listed-securities list is gone. The test is value, and it is measured throughout the year, not at year end.

That change is the single most under-appreciated part of the current rules. Under the original version of the provision, a trust holding a collectible gold coin, a private-company share, or a parcel of vacant land fell outside the exemption no matter how little the property was worth. CRA’s own worked answer on the point is explicit that a collectible gold or silver coin no longer prevents a trust from meeting the exemption, provided the value ceiling holds.

Two traps survive. First, throughout the year means what it says: a portfolio that touches $50,001 in March and settles back to $30,000 by December has failed the test for the whole year. Second, the ceiling is measured on total fair market value of everything the trust holds, not on the beneficiary’s share of it. A single piece of GTA real property will blow through $50,000 on its own, which is why the residential-property cases almost always turn on ITA s.150(1.31) instead.

Is a joint bank account with an adult child a reportable bare trust?

Usually not, for two separate reasons. First, CRA notes that in some circumstances the parties are simply joint owners or tenants in common, so no trust arrangement exists at all. Second, even if one does, ITA s.150(1.31)(a) switches off the deeming rule where every beneficiary is also a legal owner and no legal owner sits outside that group.

Work the paragraph carefully, because the second half is where these arrangements fail. ITA s.150(1.31)(a) requires both that every person treated as a beneficiary under ITA s.150(1.3)(c) is also a legal owner of the property, and that there are no legal owners who are not also beneficiaries. A true joint account between a parent and an adult child, where both can withdraw and both are treated as beneficially entitled, satisfies both limbs.

The classic failure is the convenience account: an elderly parent adds an adult child to the account solely so the child can pay bills, with no intention that the child take any beneficial interest. There, the child is a legal owner who is not a beneficiary, and the second limb of paragraph (a) is not met. Whether that arrangement then has to file turns on the $50,000 test in ITA s.150(1.2)(b) — which is why so many of these accounts are exempt on value rather than on structure.

Does a parent on title for mortgage qualification have to file?

Often no, but the exception is narrower than the folklore. ITA s.150(1.31)(b) turns off the deeming rule only where the legal owners are related individuals and the real property would qualify as the principal residence of one or more of those legal owners for the year under section 54. If the property is a rental or a second home nobody on title occupies, the exception does not apply.

Three details decide these files. The first is who is on title: paragraph (b) requires the legal owners to be individuals who are related persons, and ITA s.150(1.32) extends the ordinary meaning of related to include an aunt, uncle, niece and nephew, and confirms that a person is related to himself or herself. A family friend or a business partner added to title is outside the paragraph entirely.

The second is occupancy. The property must be one that would be the principal residence of one or more of the legal owners for the year if they designated it under section 54. The parent-on-title-for-financing arrangement passes because the child on title lives there. The parent-on-title-for-an-investment-condo arrangement does not, because no legal owner occupies it.

The third is the spousal variant in ITA s.150(1.31)(c), which is easy to miss. Where a single individual is the legal owner, the property is held for the use or benefit of that individual’s spouse or common-law partner during the year, and the property would be the legal owner’s own principal residence, the deeming rule is switched off. That covers the very common situation of one spouse alone on title to the matrimonial home.

Which other exceptions in subsection 150(1.31) are worth knowing?

Five more matter in practice: property held for a partnership that already files a T5013 information return; property a legal owner holds under a court order; Canadian resource property held for listed corporations; property held for tax-exempt persons under subsection 149(1) using Crown funds; and property held by a registered securities dealer or a regulated trust company acting as an investment entity.

• Partnership nominees — ITA s.150(1.31)(d). The property must be held throughout the year solely for the partnership, every legal owner must be a partner, and a member must be required under section 229 of the Income Tax Regulations to file the partnership information return for a fiscal period that includes December 31 of the taxation year. Nominee-corporation structures in GTA real estate development live or die on this paragraph.
• Court-ordered holdings — ITA s.150(1.31)(e). A short, clean exception where the legal owner holds the property as required by an order of a court.
• Resource property — ITA s.150(1.31)(f). Applies where all or substantially all of the property is Canadian resource property as defined in subsection 66(15), held for listed corporations, corporations they control, or partnerships with the required majority-interest partners.
• Public-money arrangements — ITA s.150(1.31)(g). Property held exclusively for persons described in subsection 149(1), where each legal owner is also such a person and the property consists solely of funds received from His Majesty in right of Canada or a province.
• Dealer and trust-company nominees — ITA s.150(1.31)(h). Narrow, and conditional: the only property must fall within the permitted-asset list in ITA s.150(1.2)(b.1)(iii)(A) to (I), and an information return must be issued for all income and gains to all beneficiaries.

Sitting alongside these is the larger listed-trust exemption in ITA s.150(1.2)(b.1), worth $250,000 rather than $50,000. It is genuinely useful, but it costs three conditions: every trustee must be an individual, every beneficiary must be an individual related to each trustee (or the graduated rate estate of one), and the only assets held throughout the year must come from a closed list — money and deposits, guaranteed investment certificates from a Canadian bank, trust company or credit union, listed shares and debt obligations, mutual fund units, segregated fund interests, personal-use property, and exempt policies valued at cash surrender value, among others. Real property is not on that list.

What happens if a reportable bare trust misses the deadline?

Where no tax is owing, ITA s.162(7) applies at $25 a day, minimum $100 and maximum $2,500. Where the failure is knowing or grossly negligent, ITA s.163(5) adds a penalty computed under ITA s.163(6) as the greater of $2,500 and 5% of the highest fair market value of all trust property at any time in the year.

Two things about that second penalty deserve emphasis, because the first filing season will be the one where mistakes get made. It is not capped, so on a property worth $1.2 million the 5% measure produces a materially larger number than the flat floor. And CRA has been explicit that an incomplete Schedule 15 — a missing tax identification number, for instance — means the schedule has not been filed, not that it has been filed imperfectly.

The mitigating fact for 2026 is that there is no prior-year compliance history to inherit. Because bare trusts were outside the rules for the 2023, 2024 and 2025 taxation years, a trustee filing for the 2026 taxation year is filing a first return, not curing an old default.

Worked example: three Mississauga arrangements, three different answers

These are composite fact patterns drawn from the kind of files that cross our desk, not particular clients. They are illustrative only.

Arrangement one — the convenience account. A widowed parent adds her adult daughter to a chequing account holding roughly $22,000 so the daughter can pay the parent’s bills. The daughter has no beneficial entitlement. ITA s.150(1.31)(a) does not help, because the daughter is a legal owner who is not a beneficiary. But the arrangement never exceeds $50,000 at any point in the year, so ITA s.150(1.2)(b) exempts it. No filing.

Arrangement two — the parent on title. A father is added to title on his son’s Mississauga townhouse so the son can qualify for the mortgage. The son lives there; the father contributes nothing and takes no beneficial interest. The legal owners are related individuals under ITA s.150(1.32), and the property would be the son’s principal residence under section 54. ITA s.150(1.31)(b) applies. No filing.

Arrangement three — the investment condo. The same father is on title to a downtown Toronto rental condo held for his daughter, who receives the rent. Nobody on title occupies it, so ITA s.150(1.31)(b) is unavailable. The condo is worth far more than $50,000, so ITA s.150(1.2)(b) is unavailable. Real property is not on the permitted-asset list in ITA s.150(1.2)(b.1), so the $250,000 exemption is unavailable. This one files a T3 return with Schedule 15 for the 2026 taxation year, due March 31, 2027.

The pattern is worth naming: the arrangements that fail are almost always real property that no legal owner occupies. If you are triaging a family’s holdings before year end, start there.

Your 2026 bare-trust decision checklist

1. Identify the arrangements. Anything where legal title and beneficial enjoyment are split — nominee corporations, parents on title, convenience accounts, in-trust-for accounts for grandchildren, property held for a partnership.
2. Test the deeming rule. Does ITA s.150(1.3) catch it? Can the legal owner reasonably be considered to act as agent, with no significant independent powers? CRA’s guidance ties this back to the meaning of bare trust under subsection 104(1).
3. Run ITA s.150(1.31) first. The bare-trust-specific carve-outs are cheaper to establish than a valuation. Paragraphs (a), (b) and (c) between them resolve most family files.
4. Then run the value tests. ITA s.150(1.2)(b) at $50,000 with no asset restriction, then ITA s.150(1.2)(b.1) at $250,000 with its three conditions.
5. Document the conclusion now, in writing. A memo dated before the year end is worth considerably more than a reconstruction dated after a CRA query.
6. Diarise March 31, 2027 for anything that does not clear. The T3 return is due 90 days after the trust’s year end, and for a calendar-year trust that is March 31.

References

• Income Tax Act, section 150 — Department of Justice consolidated statute, including subsections 150(1.2), 150(1.3), 150(1.31) and 150(1.32).
• CRA — Enhanced reporting rules for trusts and bare trusts: frequently asked questions (updated June 5, 2026).
• Income Tax Act, subsection 104(1) — the trust definition CRA relies on for the meaning of bare trust.
• Income Tax Act, subsection 162(7) — failure-to-file penalty.
• Income Tax Act, subsections 163(5) and 163(6) — gross-negligence penalty for trust reporting.

Insight Accounting CPA is a Mississauga firm led by a CPA, CA, LPA licensed by CPA Ontario. If you want a fixed-fee read on where a specific arrangement lands, our published pricing sets out what that costs before you call.