Bare Trust Reporting

 

Bare Trust Reporting - What Families Should Know

Some Canadians may need to report certain trust or ownership arrangements to CRA beginning with the 2026 tax year.

These rules can apply where one person is listed on an account or property for convenience, while another person is considered the true owner. Common examples may include:

 

  • joint bank accounts,

  • “In Trust For” (ITF) accounts,

  • or situations where adult children assist aging parents with finances or property ownership.

 

While many family arrangements may qualify for exemptions, the rules can still create filing obligations if overlooked.

 

As part of broader estate and tax planning discussions, some families also review whether beneficiary-designated products, such as segregated funds, may help simplify estate administration and potentially bypass probate.

 

 

Bare Trust Reporting - Additional Information for Families

What is a Bare Trust?

A bare trust generally exists when one person holds legal title to property or an account on behalf of someone else, while having little or no decision-making authority over the asset.

 

Common Family Examples

Examples may include:

  • Joint bank accounts between parents and adult children
  • “In Trust For” accounts for children or grandchildren
  • A child added to title for estate-planning convenience
  • A parent helping a child qualify for financing

 

Why This Matters

Beginning with the 2026 tax year, some trust arrangements may require additional reporting to CRA, even if no income is earned.

Penalties may apply for late or missed filings.

 

Possible Exemptions

Certain family arrangements may qualify for exemptions, including some:

  • low-value trusts,
  • principal residence arrangements,
  • and certain related-family ownership structures.

 

Planning Considerations

These rules are also a reminder to review:

  • ownership structures,
  • beneficiary designations,
  • estate planning,
  • probate considerations,
  • and how assets may transfer upon death.

 

Segregated Funds and Estate Planning

In some situations, segregated funds may help simplify estate administration by allowing proceeds to pass directly to a named beneficiary, potentially bypassing probate and helping maintain privacy and efficiency for families.

Segregated funds are not suitable for everyone, but they may be worth discussing as part of an overall estate and retirement plan.

 

Next Steps

If you or your family have questions about ownership arrangements, trust reporting requirements, or estate-planning considerations, we encourage you to speak with your Advisor or Account Manager to review your circumstances and discuss what planning options may be appropriate for your situation.