What are the Canadian federal tax filing requirements (T3) for inter‑vivos trusts and proposed bare‑trust exemptions starting 2026?
Executive summary
The Canada Revenue Agency’s expanded T3 reporting regime makes most inter‑vivos (and other express) trusts subject to an annual T3 return and new Schedule 15 disclosure of beneficial ownership information, and that regime has already applied to taxation years ending on or after Dec. 31, 2023 (with specific CRA guidance and FAQs) [1] [2]. Bare trusts were temporarily exempted from filing for the 2023–2025 taxation years while Parliament considers legislative amendments, but certain bare trusts are expected to be required to file beginning with taxation years ending Dec. 31, 2026 under proposed Bill C‑15, subject to specific carve‑outs and thresholds [2] [3] [4].
1. What the T3 return already requires from inter‑vivos trusts
Under the expanded rules, inter‑vivos trusts — like other express trusts resident in Canada and certain non‑resident trusts — must file an annual T3 Trust Income Tax and Information Return and, unless an exemption applies, attach Schedule 15 reporting specified beneficial‑ownership details (name, address, date of birth, jurisdiction of residence and tax ID) for each reportable entity connected to the trust [1] [5] [2]. The T3 return serves not only to report the trust’s income but also information that affects taxation of connected persons (beneficiaries, settlors), and the CRA’s T3 guide and filing pages explain how to complete the return and schedules [1] [5].
2. The bare‑trust pause: what was delayed and why
When the enhanced reporting rules were rolled out, the CRA provided relief: bare trusts would not be required to file a T3 and Schedule 15 for the 2023 and 2024 taxation years unless the CRA specifically requested it, reflecting the administrative challenge of identifying informal bare‑trust arrangements [2] [6]. That relief was extended through the 2025 taxation year in successive communications and the federal budget, with the CRA explicitly saying it “does not expect” bare trusts to file for 2025 while Bill C‑15 proceeds through Parliament [7] [8] [3]. Reporting advocates and tax professionals describe the pause as intended to give time for stakeholder consultation and drafting of targeted exemptions, not as a repeal of the enhanced reporting framework [7] [6].
3. What Bill C‑15 and the 2026 changes propose for bare trusts
Bill C‑15, as tabled in November 2025, proposes targeted exemptions and thresholds that would mean only “certain bare trusts” must file a T3 return and Schedule 15 for taxation years ending on or after Dec. 31, 2026; for example, proposed rules would exempt bare trusts holding only specified asset types whose total fair market value does not exceed $250,000 throughout the year, if other conditions are met [3] [9]. Multiple industry summaries and CRA guidance reiterate that while many bare trusts will still fall into the filing scope, the draft legislative carve‑outs aim to reduce compliance burdens for truly minimal or narrowly defined arrangements [9] [10].
4. Practical deadlines, penalties and trustee obligations heading into 2026
Trustees should expect the usual T3 filing deadline of 90 days after the trust’s year‑end (for December‑31 year‑ends that means March 31 of the following year), and CRA guidance and professional commentary warn that failure to file timely T3 returns and Schedule 15 (when required) can trigger penalties, interest and increased scrutiny [10] [7]. The CRA has indicated trustees may voluntarily file under current law even while Bill C‑15 is pending, and professional firms are advising trustees to inventory nominee and bare‑trust arrangements now to determine whether they will meet one of the proposed exemptions by 2026 [3] [7] [9].
5. Remaining uncertainties, stakeholder perspectives and what to watch
Key uncertainties remain: the precise statutory drafting of Bill C‑15, the final list of asset types and conditions for the $250,000 carve‑out, how the CRA will request historical beneficiary information for informal arrangements, and whether administrative relief (penalty leniency or phased compliance) will be available for small or inadvertent bare trusts; official CRA FAQs and departmental reviews are explicitly tracking these gaps [3] [7] [6]. Advisors and industry groups are split between welcoming greater transparency to combat tax evasion and warning that overbroad rules will impose heavy compliance costs on innocent family or nominee arrangements, which is why the government’s proposed exemptions and the CRA’s communications through 2025–2026 will be decisive [9] [10] [7].