If you spent the early months of 2024 worried that a routine, informal arrangement — your name on a property title for a family member, a holding company holding an asset for a related entity, a parent on a child's account — had quietly turned into a tax-filing obligation with stiff penalties attached, you were not imagining it. Canada's enhanced trust reporting rules pulled "bare trusts" into the net for the 2023 tax year, and many BC owners scrambled to file T3 returns and the new Schedule 15 by the spring deadline. Then, days before that deadline, the Canada Revenue Agency reversed course for bare trusts.
On March 28, 2024, the CRA announced that bare trusts would not be required to file a T3 Income Tax and Information Return, including Schedule 15, for the 2023 tax year — unless the CRA directly requests it. This post explains what a bare trust is, why so many ordinary BC business arrangements were caught, what the late exemption actually does (and does not) change, and how to position yourself for future years rather than be caught flat-footed again.
What is a bare trust, and why did this become everyone's problem?
A bare trust exists where one person holds legal title to an asset but has no real discretion or duty over it beyond following the instructions of the beneficial owner — the person who truly owns and controls it. The trustee is, in plain terms, a name on paper. These arrangements are extremely common and usually have nothing to do with tax planning:
- A shareholder holding a property in their personal name on behalf of their operating company.
- An adult child added to a parent's bank account or home title for estate or convenience reasons.
- A nominee corporation holding real estate for the beneficial owner.
- A partner holding an asset on behalf of a partnership.
For taxation years ending on or after December 31, 2023, the enhanced trust reporting rules (introduced through prior federal legislation) extended filing requirements to many trusts that had never filed before — and explicitly captured bare trusts. Suddenly, arrangements that owners never thought of as "trusts" appeared to require a T3 return and the new Schedule 15 disclosing beneficial owners, trustees, and settlors, with penalties for failing to file.
What did the CRA actually announce on March 28, 2024?
The CRA recognized that the new requirements had an unintended impact on ordinary Canadians and arrangements that posed no compliance risk. Its relief for the 2023 year was specific:
- Bare trusts are exempt from filing the T3 return and Schedule 15 for the 2023 tax year.
- The exemption is automatic — you did not need to apply.
- One exception remains: if the CRA directly requests a filing for a particular bare trust, you must comply.
Importantly, this relief applied to bare trusts only. Other trusts newly required to file under the enhanced rules — express trusts, family trusts, many holding-and-distribution arrangements — were not given this pass and still had their 2023 filing obligations.
What the exemption changes for you, and what it does not
It is tempting to read "exempt" as "this went away." It did not. A measured reading matters.
What the exemption changes:
- For the 2023 year specifically, you do not have to file a T3 and Schedule 15 for a bare trust arrangement, absent a direct CRA request.
- If you had already paid a professional to prepare a 2023 bare trust return that had not yet been filed, you may have avoided that cost.
What it does not change:
- It is a year-specific administrative relief, not a repeal of the underlying rules. The legislative framework that pulled bare trusts in still exists. Future years were left open at the time of the announcement, meaning owners should expect to revisit the question annually rather than treat the matter as closed.
- It does not relieve other trusts from their filing duties.
- It does not change the substance of your arrangements. You still need to know what bare trusts you have, who the beneficial owners are, and what assets are held — because if a future filing obligation lands, that information is exactly what Schedule 15 demands.
A worked example: the cost of two responses
Consider two BC owners who each held a commercial property personally on behalf of their operating company — a textbook bare trust.
Owner A — Reactive. Early in 2024, anxious about penalties, Owner A engaged their accountant to prepare and file a 2023 T3 and Schedule 15 for the bare trust before the deadline. Preparation and filing cost roughly $1,500 in professional fees. After March 28, that filing turned out to be unnecessary for 2023.
Owner B — Deliberate. Owner B asked the same accountant a narrower question first: "Is filing actually required, and is relief expected?" The accountant inventoried the arrangement, confirmed it was a bare trust, gathered the beneficial-ownership details into a one-page memo, and advised waiting to see whether relief materialized. Cost of that scoping work: roughly $400. When the CRA exempted bare trusts on March 28, no filing was needed, and Owner B still holds a clean, ready-to-use record of the arrangement for any future year.
Same legal arrangement, same outcome with the tax authority — but a difference of about $1,100 in fees, and Owner B is better prepared for next year. The lesson is not "ignore compliance"; it is "scope before you spend."
The real risk is the year you forget
The danger in a last-minute exemption is complacency. Owners breathe out, file the memo, and forget the topic — until a future year reinstates the requirement and the penalty regime bites. Bare trust non-filing penalties under the enhanced rules can be significant, and "I didn't know it was a trust" is not a defence.
Because the relief was granted year by year, treat bare trust reporting as a recurring item on your compliance calendar, not a one-time scare. Confirm each year, well before the spring T3 deadline, whether filing is required for that taxation year, and keep your beneficial-ownership records current.
A short action list for BC owners
- Inventory your bare trusts. List every arrangement where you (or a corporation) hold legal title to an asset for someone else's benefit, or vice versa.
- Capture the Schedule 15 data now — trustees, settlors, beneficial owners, and the assets held — even though 2023 filing is not required. This is the expensive part to assemble under deadline pressure.
- Distinguish bare trusts from other trusts. Any non-bare trust caught by the enhanced rules likely still had a 2023 obligation; confirm those were handled.
- Set an annual checkpoint each winter to re-confirm the filing position for the new taxation year against current CRA guidance.
- Talk to your advisor before paying for a filing. Scope the requirement first; file second.
Key takeaways
- On March 28, 2024, the CRA exempted bare trusts from filing a T3 return and Schedule 15 for the 2023 tax year, unless directly requested.
- The relief is automatic and bare-trust-specific; other trusts caught by the enhanced rules still had 2023 obligations.
- The exemption is year-specific administrative relief, not a repeal — revisit the question every year.
- Assemble beneficial-ownership records now, even without a filing requirement, so you are ready if a future year reinstates it.
- Scope the obligation with your advisor before paying to prepare a return.
In tax compliance, the cheapest filing is often the one you correctly determined you did not have to make.
If you are unsure which of your arrangements are bare trusts, or want a clean record ready for whatever the next tax year brings, RN Canada offers fractional CFO and advisory support to established BC businesses — let us help you scope it properly.