Bare trust reporting (T3 Schedule 15)

The term bare trust is not defined in the Income Tax Act, says the CRA’s T3 guide. The CRA’s FAQ says that in trust arrangements, including bare trusts, the person holding legal title is generally not the person who can use, enjoy and benefit from the property. Corporate records are a starting point: see what it means if a seller cannot produce basic corporate records.

What the CRA says

• In a bare trust, legal and beneficial ownership are separate, and, in the T3 guide’s words, the trust can reasonably be considered to act as agent for all the beneficiaries with respect to all dealings with all of its property
• Whether an arrangement is a bare trust depends on the facts and on the private law of the province or territory
• The CRA’s FAQ says bare trusts are not required to file for taxation years ending on or after December 31, 2024 and before December 31, 2026, and that certain reportable bare trusts are required to file for later years

What to ask

If a nominee holds title, ask for the written arrangement, who the beneficial owner is, and whether any CRA filing was required and made. The CRA’s T3 guide explains Schedule 15 for trusts generally. Related: family trust.