In 2023, CRA introduced sweeping new T3 trust reporting requirements that captured a wide range of arrangements most Canadians had never considered to be trusts — including bare trusts. The rules caused significant confusion and were ultimately subject to administrative relief for the 2023 tax year. However, bare trust reporting requirements are now in force for 2024 and beyond, and Calgary real estate investors, property owners, and joint account holders must understand their obligations. This is particularly relevant for Alberta investors who hold property jointly or through nominee arrangements — a common strategy that now carries formal reporting requirements. For a broader overview of your obligations as a rental property owner, see our guide to rental income tax in Calgary.
A bare trust exists when one person holds legal title to property on behalf of another person who is the true beneficial owner — and the legal holder has no discretion over the property; they must deal with it entirely as directed by the beneficial owner. Common examples include:
The key characteristic is that the legal holder has no beneficial interest — they are simply holding on behalf of someone else.
Under rules effective for trust years ending after December 30, 2023, all express trusts resident in Canada — including bare trusts — must file a T3 return annually. The T3 return for a bare trust must disclose:
This information disclosure requirement is the primary driver of the changes. CRA's goal is to identify the true beneficial ownership of property — particularly real estate — through the trust reporting framework.
Not all bare trusts must file. Exemptions include:
| Arrangement | Likely Bare Trust? | T3 Required? |
|---|---|---|
| Parent on child's bank account | Yes | Possibly — depends on exemption |
| Parent on title for mortgage | Yes | Yes — real estate over $50K |
| Joint investment account (one beneficial owner) | Yes | Depends on value/type |
| TFSA or RRSP | No — registered plan | No |
| Agent holding client funds momentarily | Possibly — depends on facts | CRA guidance ongoing |
If you think you may have a bare trust arrangement — particularly involving real estate, bank accounts, or investment accounts where the legal and beneficial owners differ — you should:
Many joint ownership arrangements were established for estate planning purposes — to allow assets to pass outside the estate and avoid probate. The new bare trust reporting requirements add compliance costs to these strategies. In some cases, reviewing whether the estate planning benefit still outweighs the reporting burden — or whether alternative strategies (a designated beneficiary, a will, or a different ownership structure) are more efficient — is worthwhile. Calgary real estate investors who are considering restructuring their property holdings may also want to review whether incorporating in Alberta offers a cleaner structure for both estate planning and ongoing tax efficiency.
Many Calgary property owners discovered in 2023 that they unknowingly had reporting obligations for arrangements they had never considered to be trusts — and a 5% gross-value penalty for gross negligence is not a risk worth taking on real estate holdings. Determining whether your arrangement constitutes a bare trust, whether an exemption applies, and how to properly complete the T3 and Schedule 15 are tasks best handled with professional guidance. Our corporate tax team and trust specialists assist Calgary real estate investors and families with trust identification, ownership structure review, and T3 compliance. If you're unsure whether your property arrangement triggers a filing obligation, book a free consultation — the March 31 deadline moves fast.