Bare Trust Reporting Is Back in the Spotlight

Beginning with taxation years ending on or after December 31, 2026, certain reportable bare trusts are expected to become subject to enhanced trust reporting requirements. Additional guidance from the Canada Revenue Agency (CRA) is expected before these rules take effect. Now is a good time to become familiar with the upcoming changes and consider whether they may apply to your circumstances.

What Is a Bare Trust?

In simple terms, a bare trust exists when one person or entity holds legal title to property while another person is considered the beneficial owner. Determining whether a particular arrangement is reportable depends on the specific facts and circumstances.

Could These Rules Affect You?

Examples that may warrant a review include:

• A person holding legal title to property for the benefit of another person.

• An adult child added to a parent's bank or investment account for convenience.

• Certain joint ownership arrangements created for estate or succession planning.

• Other arrangements where legal ownership and beneficial ownership may not be the same.

These examples do not automatically create a reporting obligation. Every situation should be reviewed on its own facts.

What Should You Do?

Now is a good time to review any ownership arrangements that may involve different legal and beneficial owners. If you're unsure whether the upcoming reporting requirements may apply to your circumstances, speaking with your tax advisor before the 2026 filing season can help determine whether any action may be required.

We're Here to Help

Our team continues to monitor developments surrounding the enhanced trust reporting rules. If you have questions about how these upcoming changes may affect you or your family, we'd be pleased to review your situation.