If you’ve ever put your name on a bank account for your child, helped a sibling get on a property title, or held an investment for a family member — CRA’s new bare trust rule could cost you tens of thousands of dollars in penalties. Even if you owe nothing in tax.
The rule has been delayed three times since 2023. It just passed the House of Commons in February 2026 as part of Bill C-15 — a 600-page omnibus budget bill — and it’s currently sitting in the Senate. Once it receives Royal Assent, the filing obligations apply starting with the 2026 tax year.
Here’s everything you need to know — and what you can do right now.
What Is a Bare Trust?
A bare trust is one of the simplest legal concepts in Canadian tax — but most Canadians have never heard of it.
It exists whenever your name is on something, but someone else is the real owner. Or when someone else’s name is on something, but you’re the real owner. That’s it.
The problem is that these arrangements are everywhere. Canadians create bare trusts constantly — often without realizing it — through completely normal financial decisions. Opening a bank account for a child. Going on title with a family member to help with financing. Holding crypto for a parent who doesn’t know how to use an exchange. Structuring a business with property held through a separate corporation.
Every one of these situations could now require a special annual tax filing — a T3 return with Schedule 15 — disclosing the names, addresses, dates of birth, and tax identification numbers of everyone involved.
The Penalty Math That Makes No Sense
If you file your personal income tax return late and you actually owe CRA $10,000 in tax, the late filing penalty is approximately $500. You owed money. You were late. That penalty makes sense.
Now consider the bare trust penalty. You have an arrangement that CRA considers a bare trust. You owe CRA absolutely nothing — zero dollars in additional tax. But you didn’t know about this filing requirement, so you didn’t submit the form. The penalty under the gross negligence provision is up to 5% of the highest fair market value of all property held in the trust.
For a $200,000 investment account — that’s a $10,000 penalty. For a $500,000 property — $25,000. For a $1 million property — $50,000. Per year.
Miss two years because nobody told you? Double it.
$500 when you actually owe money. Up to $50,000 when you owe nothing. From the same agency.
A Real-World Example
A parent opens an investment account for their daughter when she’s born. They contribute a little every year. Fifteen years later, the account has grown to $200,000. The parent had no idea this was considered a bare trust — why would they? They were saving for their child’s future. The income was being reported on their personal tax return the entire time.
CRA comes knocking. 5% of $200,000 is $10,000. Multiply by several years of non-filing. Add interest. The parent says: I don’t owe any tax. This money is for my daughter. CRA says it doesn’t matter.
What's Exempt (And What's Not)
Now exempt:
Parents on the title of a child’s principal residence to help with a mortgage (as long as everyone on title is a related family member). Joint bank accounts between spouses where both benefit. Any bare trust arrangement where total assets stay under $50,000 throughout the year.
Still NOT exempt:
Investment accounts set up for a child that have grown past $50,000. A sibling on the title of a rental or investment property to help with financing. Cryptocurrency held on behalf of a family member. Businesses holding property through nominee corporations — which can trigger hundreds or even thousands of separate filings for a single organization.
CRA Can't Even Tell You If This Applies
CRA’s website states that determining whether a particular arrangement constitutes a bare trust is “a question of fact and law” — and that CRA cannot provide legal advice on whether it applies to your specific situation.
They created the penalty. They wrote the rules. And when taxpayers ask whether they’re caught by them — CRA says it can’t tell you.
How We Got Here
CRA first attempted to implement the bare trust reporting requirement for the 2023 tax year. The launch was chaotic — CRA ultimately suspended the requirement just days before the filing deadline. By that point, 44,000 Canadians had already paid their accountants to file returns that CRA then said weren’t needed. No refunds were issued. The Taxpayers’ Ombudsperson publicly criticized CRA’s handling.
The requirement was delayed again for 2024, and again for 2025. During each delay, professional organizations including CPA Canada and the Canadian Bar Association submitted formal objections, arguing the rule was too broad and would catch ordinary families in a net designed for illicit financial arrangements.
In November 2025, the government included the revised bare trust rules in Bill C-15 — an omnibus budget implementation bill spanning over 600 pages. There was no separate debate. The bill passed the House of Commons on February 26, 2026, and is currently at second reading in the Senate.
What You Can Do Right Now
The bill has not become law yet. It is sitting in the Senate.
Sign the petition. [Find the Petition Here]
It only takes thirty seconds.
Send a letter to your MP. [Download the free Letter template]
Find your MP at ourcommons.ca/members, and send it today.
Share this article or the video. [Watch the Video Here]
Send it to your parents. Your kids. Anyone whose name is on something that belongs to someone else. Most Canadians have no idea this is coming.
A tax rule designed to catch criminals should not punish Canadians for helping each other.
