New Bare Trust Filing Requirements - CHANGED March 28, 2024

The filing requirements for Bare Trusts was changed by Canada Revenue Agency (CRA) on Thursday March 28, 2024.  Now the majority of bare trust returns DO NOT need to be filed.  See the link below for the news release from CRA.

The information below was created based on the original rules as established by CRA and no longer require a filed return unless CRA requests one.

Bare Trusts, commonly used for estate planning and asset protection purposes, are now required to file a Trust Tax Return – and many people may be caught by these new requirements without realizing it.

  • What is a Bare Trust? This is when someone (a trustee) acts as an agent for the beneficiary but has no ownership of the asset.
  • A few examples include:
    • a child who is on title of their parents’ house for estate (probate) planning purposes,
    • a parent who has co-signed for a child’s house and is on legal land title but is not a co-owner of the house,
    • a person who is listed joint on someone else’s bank account but does not have any ownership of the funds in the account (valued at over $50,000)

Individuals who are identified as a trustee of a bare trust must file a trust return by March 30 each year to avoid penalties and additional tax liabilities. The late filing penalties can range from $100 - 2,500, plus additional failure to file penalties (if CRA believes the taxpayer knowingly did not file). Contact our office for more information.

March 1, 2024 | Mike Biette