As it stands, the filing deadline for 2022 UHT returns—which has been extended multiple times—is April 30, 2024. For 2023 UHT returns, these are also due on the same date but may end up being exempt from filing for 2023 and future years. This is because the fall economic statement from the federal government proposed changes to exempt certain Canadian trusts, including bare trusts, from having to file. The draft legislation has not yet been passed into law. But it’s likely that most bare trusts may be exempt from filing UHT returns for 2023 and in the future.
Ask MoneySense
I have been on my children’s bank account for many years. These accounts are totally run by them. The accounts all have under $50,000. Do I need to file?
—Bipin
Accounts with less than $50,000 and different beneficiaries
Each account would be considered a separate bare trust, Bipin, as the beneficiaries are different. If the fair market value during the year of each is below $50,000, you should be exempt from filing.
Ask MoneySense
What if you have three different joint bank accounts with a parent that total $50,000? I.e. $25,000 in one, $15,000 in the second, and $10,000 in the third. Would that constitute one trust of $50,000 or three separate trusts under the $50,000 threshold?
—Amy
Several joint bank accounts with less than $50,000 each
There is a $50,000 T3 trust tax filing exemption threshold that applies for bare trusts. According to the CRA, a bare trust is exempt from filing a T3 return if it is:
“a trust that hold assets with a total fair market value that does not exceed $50,000 throughout the year, if the only assets held by the trust throughout the year are one or more of:
(i) money (note that money does not include collectible gold or silver coins, or gold or silver bars),
(ii) a debt obligation described in paragraph (a) of the definition “fully exempt interest” in subsection 212(3),
(iii) a share, debt obligation, or right listed on a designated stock exchange,
(iv) a share of the capital stock of a mutual fund corporation,
(v) a unit of a mutual fund trust,
(vi) an interest in a related segregated fund (within the meaning assigned by paragraph 138.1(1)(a) of the Income Tax Act, and
(vii) an interest, as a beneficiary under a trust, that is listed on a designated stock exchange.”
So, basically, if a bare trust only owns cash, guaranteed investment certificates (GICs), bonds, stocks, mutual funds or exchange-traded funds (ETFs), it may be exempt from a T3 trust tax filing requirements if its assets are less than $50,000 during the entire year.
A trust can own multiple assets. As a result, it’s probably reasonable to conclude that the accounts would be combined if the trustees and beneficiaries are the same—such as being joint on multiple bank accounts for one of your parents, Amy. And if the accounts exceed $50,000 in total at any point during the year, this could lead to a T3 trust return filing requirement. The CRA has not specifically confirmed this.
Ask MoneySense
Since any income will be reported directly by the beneficiary, I don’t understand the purpose of filing nil T3s. Can someone explain?
—Sherry
What is the purpose of the new bare trust filing obligations?
You are correct, Sherry, that the income for a bare trust is reported by the beneficiary who beneficially owns the asset generating the income. This differs from a formal trust where the trust itself can report the income and pay tax on it (typically at the top tax rate) unless some or all of the income is allocated to the beneficiaries by the trustees.
Why is the government requiring bare trusts to file T3 returns now?
The 2018 federal budget first introduced the new bare trust filing requirements. The Department of Finance released the following statement to Investment Executive: “Better information on who owns which legal entities and arrangements in Canada—known as ‘beneficial ownership information’—will help authorities to effectively counter aggressive tax avoidance, tax evasion, money laundering and other criminal activities perpetrated through the misuse of corporate vehicles.”
I read somewhere bare trusts have to file 2022 UHT return, but not for 2023 or any future years. I don’t see that discussed here. Can you clarify? Thank you kindly.
What if you have 3 different joint bank accounts with a parent that total $50,000? I.e. $25,000 in 1, $15,000 in the second, and $10,000 in the third. Would that constitute one trust of $50,000 or 3 separate trusts under the $50,000 threshold?
Hi Jason, I really appreciate all the work you do in providing info like this. You have a knack for making it simple but comprehensive at the same time – which is a great talent!
Looking forward to seeing the next article.
Since it any income will be reported directly by the beneficiary, I don’t understand the purpose of filing nil T3s…can someone explain?
Are people required to file a trust/get a trust # for EACH asset, even if they relationship is the same? For example, joint on title between parent/child for home, bank account, investment accout.
No tax implications on new bare trust filings for Joint bank accounts, basically a blank T3 FORM to file, but late filing penalties of $25 a day!
A new low for CRA!
Is an RESP a bare trust?
Hello
I have been on my children’s bank account for many years
These accounts are totally run by them
The accounts all have under $50,000.
Do I need to file
I inherited a house from my husband, we never added me to the deed or the mortgage. I paid the mortgage for a year and half after his death. I also resided in this home. I sold fall of 2023, filed an under used return. A disposal was recorded on his 2022 return. Do i have ro file a bare trust return for this property? Will this end up costing me money other than paying the accountant to do the return if required.
My husband and I co-signed a mortgage for our son and daughter-in-law. We are all on Title. I believe we are 50% owners. However, we have no financial interest in the home. We co-signed for mortgage approval only. What do we call ourselves? Are we all beneficiaries or do we have another agent name?
Once you’ve filed a T3 for a joint bank account (i.e. adult child of ageing parent) with a balance over $50,000, do you need to keep filing every year afterwards even if the balance drops below $50,000?
Is a cottage put in trust by the parent owner a reportable trust?
Does the trustee (owner) and beneficial owners (normally the adult children) also need to file a trust return? I’m assuming all these returned would use the same trust number.
With no renting going on there is no income in this arrangement to report. With no income do the trust reporting requirements still apply?
I am listed on my mother’s bank accounts, however, I have Power of Attorney (POA) as a result of a stroke. I assume the POA means this is no longer a Bare Trust?
Hi Jason,
If my parents put me on the deed of their house and it is also in the will this is a bare trust correct. If so would my parents be the trustee and myself the beneficiary. Would I file for the trust # or would that be my parents?
Earlier in this article the following statement was made: “In the case of a parent co-signing a mortgage, it is the parent who needs to file.”
In my case I am a parent listed on the title of a property (home) purchased by my daughter and her husband with my aid. I am listed as owning a 1% share on the title in the Capacity of Tenant in Common with my daughter and son-in-law being listed as joint tenants and together owning the other 99%. Effectively I am only a guarantor. I would think the trustee in this case would be the prime on the mortgage (my daughter doing the administration for her own best interests) and she would need to file listing myself as a 1% beneficiary. Does this sound right as it contradicts the automatic parent filing the T3 on a co-sign?
– On T3 Schedule 15 for joint bank accounts between child and elderly parent: Does the child have to
report themself as the “Trustee” and the parent as the “Beneficiary”? Is that all? Or does the child also
have to declare who is “Settlor” and “Controlling person”? Who is settlor/controlling person in this case? – What if the child is going to inherit the funds (as per will or agreement) in the future? Does the child also
have to report himself as the “beneficiary” on the schedule 15? Or is this no longer considered a bare
trust because the child is considered as one of the beneficial owners?
– CRA instructions say to complete Step 1 of the T3 return. Step 1 includes page 2 which has 14
questions. I don’t even understand these questions. Does the child just answer NO to each of them?
– It seems the $50,000 threshold is for the Schedule 15, not for the T3 return. Is it possible that all joint
accounts still have to file T3 return regardless of the value of the assets?
Hello, my minor kid has his own bank account opened in 2023 and the grandparent from oversea who are not tax resident in Canada wired some money to him as educational fund, because during the year, the fair value exceeded 50K. I presume the earned income needs to be filed this year. But under whose name? because the money is directly from grandparent. Kindly advise. Thank you.
My husband and I have jointed bank accounts over $50,000. Do we have to file a bare trust return?
Do the T3 2023 or 2022 UHT return requirements apply in the case of an estate where the person having the Bare Trust from 2016 died in 2022?
Parent owns the condo and the deceased is named on title and was an adult age child of the Parent and condo owner.
A Declaration of Trust by the adult age Child was formalized in writing, is sealed by a notary and states ” I have no interest whatsoever in the above referred to interest other than that of a bare trustee and than any distribution whether of income or capital and whether in cash or otherwise, and any rights in respect of the property as well as proceeds arising from the sale thereof, do not in any manner below to me as to the entire interest but is the property of the said “named owner not show for privacy”.
CRA won’t provide an answer and is pointing me to a Trust Lawyer to make the determinations. Any feedback is welcome
There are inconsistencies. If there are joint parent/child accounts and investments the tax is already paid and covered in the normal tax return with T5s. Why should I have to double report it on a bare trust T3 return?
If I, as a daughter, have an investment on which I have my mother joint with me, and it is over $50k does she have to do a bare trust?
Please confirm if bare trusts are only for parents and adult children. It is very confusing if they are a) joint bank accounts (tax is already paid normally) and b) joint investments. Parent/child and child/parent.
I assume Savings Accounts are required to file as Bare Trusts, do checking accounts also need to file.
I have joint checking accounts with my wife and 60 yr old son, are they bare trusts and who would be required to file.
Is a GIC held jointly with spouse and a savings account held jointly with spouse subject to the new bare trust filing requirements per CRA
I bought with my own money in 2022 1% of a treed 105 acres property and my son bought the 99% of that property with his own money.The land is abutting my sons farm and in Ontario the property would have merged into one property if I had not bought the 1%. This has nothing to do with estate planning, but to avoid two properties to become one property. Is my son a beneficial because the two properties retain a higher value versus a merged one.?? If so, is this now a bare trust?? Do we both have to file a trust return or which one of us or not at all?? Your answer would be appreciated as nobody could answer my questions sofar.
Thanks, Peter
If I have a joint account with my Mother, but am also a beneficiary of the account, is this still a bare trust? Thank you for the helpful article!
While this article has more clarity than others, it still leaves unanswered questions about this new tax law. Apparently the confusion runs a little deeper than even my trying to understand it.
With housing price these days; regardless of having a high five figure or low six figure income, most of us home buyers are requiring a parent to sign on as a co-owner or guarantor. Either of which puts them on title.
Trying to get clarity as whom is responsible for filing seems lost on everyone. Even this article when answering an inquiry as to who is responsible for filing states that the parent as a co-signer is responsible for filing. While two lines later it states that any adult child sharing an asset with an elderly parent, the child is required to file. A house is an asset and my parent is elderly. Who is responsible?
Since I caught the news a couple of weeks back I’ve been trying to get answers. My real estate lawyer is at a loss. My parents accountant; being in a very small Ontario farming community, doesn’t seem to be able to provide a clear answer and thought I was asking to setup a legal trust. I visited the bank that holds the mortgage and it seems they learned about the new tax law at the same time as everyone that follows the financial news did; just a couple of weeks ago. They have no answers. My own accountant is the middle of tax season; my taxes have been done since Feb 20th, I’m hoping they have time to reply to me with some clarity on this. Though I’m not holding my breathe.
It seems the CRA has rolled out a new tax law; well into the tax season, without having a clear definition as to what a bare trust is on their own website as to how it relates to this. Giving the Canadian tax payer a deadline of just over two weeks to address it or face hefty fines. While saying those fines maybe forgiven as this is a ‘learning year’ despite saying it’s $25 a day, up to $2500 or 5% of the value of the asset. All while providing very little clarity to the institutions that we use to navigate the CRA. And the CRA website is like reading ancient latin most of the time to the laymen.
My parents co-signed my mortgage to provide the bank with piece of mind that if I miss the mortgage payment the bank has recourse to get paid. My parents have zero responsibility for the home I own other than that. They are simply a name on a document. They receive no income from my home. This isn’t some grand scheme of money laundering or tax avoidance. It is simply the reality of being able to own a home in this day and age. Something I’m sure my younger niece and nephew will never attain if the market continues its upward trend.
I live in BC. Perhaps the CRA should have taken a lesson from the BC Vacancy and Speculation tax. It couldn’t be clearer or simpler. My parents receive notice, as do I. My parents don’t live there. Yes, I do live in the home. Great. Thanks. No additional taxation required. Takes minutes to fill out online. Rather than roll out something mid tax season with little clarity and contradicting examples, requiring a professional accountant that seem to be just as confused as the rest of us.
At least I can justify to myself the price my accountant charges me with the extra work I’m requesting considering I filed my taxes over a month ago.
My brother and I have been joint owners of some GIC’s with my mother for several years. All but one of these is under $50,000. One is over that amount. When I asked my accountant if these joint GIC’s would constitute bare trusts, he advised that since they were joint and there are no beneficiaries that we are holding the certificates in trust for they would not require T3 reporting. Is his interpretation correct?
I live with my elderly mother (this is my primary residence) who is the sole owner of the home. She wants to set up a joint tenancy for me to become half-owner of the home to avoid probate and related fees when she dies and the property falls to me. Does this constitute a bare trust? We would like to avoid that.
With the new laws, does a Joint Tenancy automatically become a Bare Trust?
My wife and I opened an in trust account at TD a number of years ago for our grandchildren starting with $1000 for each child ($4000) in total. I’m assuming this would fall under the new trust laws. The acct has not grown much — up to $32K total. My wife and I have always claimed any income/cap gains, etc. related to this acct as part of our annual tax returns. It is listed as part of my wife’s acct structure. All the “kids” are now adults. I find doing my and my wife’s taxes burdensome enough as is. How do I close this in trust account? Do I just disperse all the money to the kids and close it? Can I close it and transfer the funds to a regular margin acct and continue to manage it and continue to imbed any related income in our annual taxes? How to proceed without this burden hanging over our head every year?
I have joint accounts with my spouse that we split the income from and report like that on our taxes. Do we need to file any of this T3/S15 stuff for those accounts? (yes, they are more than 50K)
Thanks.
This is the first I have read of the requirement for 2023. Appreciate the background of the intent.
My brother and I have a join account with a parent, over $50,000.
When split so the actually benefit would be less than the $50,000 threshold do we need to file a T3?
Thanks
I spent about 2 hours on hold on the phone last week because the CRA website was failing to let me register for a trust ID number. The person I spoke to had no answers but did say others were having the same problem. They said someone was going to get back to me but never did. Then I spent another hour on hold to ask some questions about filing a T3 and schedule 15. Now I find out it was all a huge waste of time and unnecessary stress because they decided to drop the reporting requirement at the last minute. To say that I am angry about this whole debacle is an understatement.
Ok based on the article, I am convinced that we have a “bare trust”. It involves a 95yr old parent who makes the investment decisions, and who currently claims 100% of the income & gains on her tax submission. Her 3 adult children got added to her bank account which has over $50k, along with her investment account also over $50k. On both accounts, at separate institutions, all 4 family members are listed as JTWROS. Questions:
1) Which member is the “trustee” who must file a T3 tax return for the trust? Presumably that trustee, is the one who will assume the tax liability, and is the mother. Or can any of the 4 volunteer to be designated the trustee for T3 purposes and the mother can continue to file for taxation purposes?
1b) So T3 filing for Bare Trust purposes, only requires information, and the T3 does not capture the actual income and expenses. Income & expenses will be filed as was done in previous years.
In previous years the mother declared all the income. Even though all 4 are beneficiares, please confirm only the mother who controls the investment decisions, and physically receives the income, for CRA purposes only needs to claim on her regular tax filing. In essence T3 process for “bare trusts” is an information gathering process, and has no financial filing requirements….. for now, until the feds wish more tax grab.
2) Schedule 15 of T3 process- confirm it essentialy collects only information about the 4 beneficiaries. The mother may deem herself the trustee, while the daughters will declare as beneficiaries?
Do all 4 schedule 15’s get filed together when the T3 document gets filed, or can each of the daughters file their own Sch15 online separatly?
Thanks
A parent is sole person on legal title for a condo; the child is the beneficial owner having paid the down payment and all related costs. Is this a “bare trust” relationship? Condo sold in 2023. Does parent claim the capital gains on personal tax return or is this a “bare trust” filing and child claims on hers?
I don’t know why a magazine like this would want to give support to the idea that every joint account held by 2 people would automatically be a trust. It’s just not true from a legal standpoint, although maybe CRA is taking that position. I don’t think the issue is at all settled. Joint ownership was originally a form of legal *ownership* of 2 people together of the same asset. They both hold a portion of the legal title. Maybe a gift establishes this ownership at hte outset, but it results in ownership of the asset (full beneficial and legal title). Trusts are where a trustee holds legal title of property and holds a beneficial interest in all or part of that property for a beneficiary. I do not think every joint account situation is a “trust”, even if CRA would like to put them in the same basket as a tax grab. In my personal opinion, it’s a bit irresponsible for this magazine to not provide more clarity or detail on this issue, which has been the source of many heated discussions between accountants, or pushback on this concept. I would like to see an article written by property lawyers perhaps giving the pros and cons of each side of this debate, rather than the concepts being conflated with no mention that this is not settled. Is Money Sense now working on behalf of CRA? I hope not.