Which bare‑trust scenarios involving real property remain subject to reporting under Bill C‑15?
Executive summary
Bill C‑15 narrows the reach of the expanded trust‑reporting regime by carving out many routine family and financial arrangements from the bare‑trust filing obligation, but bare trusts that involve real property or arrangements that leave beneficial ownership with someone other than the registered legal owners generally remain reportable and therefore subject to T3/Schedule 15 filing and penalties (CRA and Finance guidance) [1] [2] [3]. The distinction turns on the statutory “listed trust” test and whether real property is an eligible asset under the exemptions — if it is not, the bare trust is typically not exempt [4] [3].
1. How the new exemptions are supposed to work — the headline test
Bill C‑15 proposes exemptions so that a bare trust can avoid T3/Schedule 15 reporting where throughout the year the trustees and beneficiaries are related, the trust’s assets meet a narrow list of eligible asset types (cash, GICs, mutual funds, segregated funds, certain securities and now certain Canadian life insurance policies) and the fair‑market value (FMV) of trust property stays below a monetary threshold — a framework designed to protect common family arrangements such as an adult child managing a parent’s bank account [1] [5] [6].
2. Why real property is usually the red line that triggers reporting
Real property is explicitly excluded from the list of eligible assets that create a “listed trust” exemption, so a bare trust holding land, a cottage or other real estate will generally fall outside the safe harbour in Bill C‑15 and remain required to file a T3 and Schedule 15 (CRA examples and updated guidance make this point using cottage and Toronto/Winnipeg hypotheticals) [3] [4] [2].
3. Concrete bare‑trust real‑property scenarios that remain reportable
Practical examples flagged in CRA and practitioner guidance show that developer nominee arrangements that place registered title in a bare trust while beneficial ownership remains with the developer, cottages or vacation homes held through a bare trust, and trusts that temporarily hold real property even if other assets are eligible will generally be required to file T3s and Schedule 15 (CRA FAQs and legal commentaries cite a property‑developer bare trust and the Winnipeg Trust cottage example as reportable) [7] [3] [4].
4. Partnership, joint venture and nominee title uses that usually trigger filing
Industries that commonly use nominee or bare‑trust structures — real estate development, partnerships and joint ventures, cross‑border property holding arrangements (CBTs) — were singled out by advisers as likely to remain within the reporting perimeter when the structure involves legal title separate from beneficial ownership, because those arrangements often involve real property or a deemed trust under the Income Tax Act [8] [9] [10].
5. Timing, temporary relief and remaining uncertainty
The Canada Revenue Agency administratively waived the filing obligation for bare trusts for recent early years and explicitly said it does not expect bare trusts to file for taxation years ending in 2025 while Bill C‑15 proceeds through Parliament, but it warned that certain bare trusts will be required to file for taxation years ending on or after December 31, 2026 if they do not meet the statutory exemptions — leaving a transition window but not relief for real‑property cases once the law and guidance settle [2] [1] [3].
6. Penalties, incentives and the politics behind the carve‑outs
The enhanced regime carries steep penalties for non‑filing and gross negligence — including a penalty equal to the greater of $2,500 or 5% of the highest FMV of trust property during the year — which makes accurate classification urgent for real‑property bare trusts, and industry groups (STEP Canada, life‑insurance advocates, practitioners) have actively lobbied for the carve‑outs and asset‑list tweaks that appear in Bill C‑15, a dynamic that helps explain why the legislation narrows reporting even as CRA maintains examples where real property still triggers filing [10] [1].
Bottom line
Under the current Bill C‑15 drafting and CRA guidance, ordinary family and financial bare‑trusts holding only the listed eligible assets and meeting the related‑party and FMV tests can expect exemption, but any bare trust that holds real property, serves as a nominee holding title while beneficial ownership lies elsewhere, or otherwise falls outside the narrow asset list will remain subject to T3 and Schedule 15 reporting and the associated penalties [4] [3] [2].