If your corporation holds real estate in a director's name "just for administrative reasons," or a family member's name is on a bank account that's really your business's money, you might be running a bare trust — and starting with the 2026 tax year, the Canada Revenue Agency wants to know about it.
For three years running, Ottawa has tried and failed to get bare trust reporting off the ground. Proposed rules for the 2023 tax year were suspended at the last minute. The 2024 and 2025 filing seasons came and went with the CRA quietly confirming that bare trusts still didn't need to file. That streak of reprieves just ended. Bill C-15 — the legislation implementing the November 2025 federal budget — received Royal Assent on March 26, 2026, and it locks in mandatory bare trust reporting starting with taxation years ending on or after December 31, 2026. For most small business owners, that means the 2026 calendar year, with a filing deadline of March 31, 2027.
If you've never heard the term "bare trust" before, you're not alone — and that's exactly the problem this article is meant to fix. A surprising number of small businesses have one without realizing it.
What Is a Bare Trust, Really?
A bare trust (also called a nominee or simple trust) exists whenever one person or entity holds legal title to property, but someone else holds all the beneficial ownership and calls all the shots. The trustee is essentially a name on paper — a placeholder with no independent authority over the asset.
You don't need a trust deed, a lawyer, or even the word "trust" anywhere in your paperwork to have one. The CRA looks at substance, not labels. Common small-business scenarios that qualify:
- Nominee corporations. A numbered shell company holds legal title to a commercial property, while the operating business (or its shareholders) actually owns and controls it — a structure real estate and franchise operators use constantly to simplify financing or keep a property arm's-length from operating liabilities.
- Director- or shareholder-held assets. Your corporation registers a vehicle, a piece of equipment, or even real estate in a director's or shareholder's personal name for convenience, while the company pays for it, insures it, and treats it as a corporate asset on the books.
- In-trust-for accounts. A business owner opens a savings or investment account "in trust for" a child or family member, funds it with company or personal money, but retains full control over deposits, withdrawals, and investment decisions.
- Joint ventures and co-ownership arrangements. One party is registered as the sole legal owner of a jointly-financed asset (a piece of commercial land, for example) purely to simplify the paperwork, while the actual economic interest is split among several investors.
- Corporate reorganizations mid-stream. Assets are held by one entity temporarily during a restructuring, merger, or estate freeze, with beneficial ownership already assigned to another party.
If any of these sound like something happening in your business right now, it's worth a conversation with your accountant before year-end — not after the CRA sends a letter.
What Actually Has to Be Filed
Trusts caught by the new rules file a T3 Trust Income Tax and Information Return along with Schedule 15, "Beneficial Ownership Information of a Trust." Schedule 15 isn't a simple checkbox — it requires the name, address, date of birth, jurisdiction of tax residence, and tax identification number (SIN or business number) for every trustee, settlor, beneficiary, and any person who controls the trust's decisions.
For a small business, that can mean disclosing detailed personal information about directors, shareholders, family members named on accounts, and anyone else with a beneficial stake — even if that stake was never formalized in writing.
The Exemption That Might Actually Apply to You
Before you panic, check whether your arrangement qualifies for the narrow carve-out the CRA has confirmed survives into the 2026 rules. A bare trust is exempt from filing Schedule 15 if both of the following are true:
- It has existed for less than three months during the tax year, or it holds property with a total fair market value of $50,000 or less throughout the year; and
- Its holdings are limited to money, government debt obligations, and listed securities.
That second condition is the trap. A lot of small operations assume they're under the $50,000 threshold and stop reading — but if the trust holds real estate, private company shares, or business equipment instead of cash and public securities, the exemption doesn't apply no matter how small the value is. A bare trust holding a single piece of commercial real estate worth $40,000 still has to file.
What Happens If You Don't File
The CRA has built in real teeth for non-compliance, and it applies per trust, not per business:
- Late-filing penalty: $25 per day, with a minimum of $100 and a maximum of $2,500.
- Gross negligence penalty: the greater of $2,500 or 5% of the highest fair market value of the trust's property during the year — with no cap. On a trust holding a $2 million commercial property, that's a potential $100,000 exposure.
The CRA has previously granted broad penalty relief for the 2023 tax year while the rules were in flux, waiving the standard late-filing penalty for reasonable, non-negligent late filings. Nothing published so far guarantees the same grace period will exist once the 2026 requirement is actually mandatory and businesses have had a full year of advance notice — treat this as the year the leniency runs out.
Why This Keeps Tripping Up Small Businesses Specifically
Large corporations with in-house tax teams have been tracking this rule since it was first proposed for 2023. The businesses most likely to get caught off guard are smaller operations where a bare trust arrangement was set up years ago by a lawyer or accountant for a narrow purpose — asset protection, a real estate closing, an estate plan — and then never revisited. Nobody thinks to ask "is this still a trust?" because nothing about day-to-day operations feels trust-like.
The fix isn't complicated, but it does require a deliberate step: inventory every asset your business doesn't hold in its own, direct legal name. Walk through corporate real estate titles, vehicle registrations, equipment leases, and any account with an "in trust for" designation. For each one, ask who has legal title versus who actually controls and benefits from the asset. Any mismatch is a candidate for Schedule 15.
Keep Your Business Records Trust-Ready
Untangling who legally owns what — and who actually controls it — is a lot easier when your books already separate legal structure from economic reality. Beancount.io's plain-text accounting keeps a complete, version-controlled history of every asset your business touches, so when a compliance question like bare trust reporting comes up, you're not reconstructing ownership from memory. Get started for free and keep your financial records as auditable as your legal ones.