Bare trusts will not require the submission of a T3 Return or Schedule 15 for the 2024 tax year as the Canada Revenue Agency (CRA) extended its reporting exemption it introduced in 2023.
Last year’s exemption did away with mandatory filing of T3 Income Tax Information Returns and Beneficial Ownership Information of a Trust for bare trusts, also known as naked trusts. However, the CRA says it reserve the right to make direct requests for filing from bare trusts.
According to CRA officials, other affected trusts will still require annual reporting.
Bare trusts are an arrangement where the original owner or owners of a property maintains legal ownership, including legal title, but all duties, obligations and responsibilities belong to the designated trustee.
For example, if a parent is on title of a child’s home – without the parent having beneficial ownership – to help the child obtain a mortgage, or a corporate bank account is opened by the shareholders with the corporation being the beneficial owner of the funds.