Preparing for the upcoming tax filing season? We have two free resources to help you identify clients who may have bare trust reporting obligations.
The new rules in subsection 150(1.3) of the Income Tax Act (Canada) will require taxpayers to report the so-called bare trusts and similar arrangements for taxation years ending on or after December 31, 2026. The first T3 returns for bare trusts with a December 31st year end will become due on March 31, 2027.
If you are a Canadian accountant or a tax preparer, you may remember the confusion surrounding the government's first attempt to introduce reporting requirements for bare trust in 2024. Since then, the rules have evolved and the Canada Revenue Agency (CRA) provided additional guidance.
Unfortunately, identifying a reportable bare trust is still not easy. These arrangements are often not documented in writing. Many regular Canadians have never heard of a bare trust, even though they may have been involved in one. They may hold property for their children, have their names on their parents’ bank accounts, or hold legal title to assets that belong to their corporations.
Most clients probably won't walk into their accountant’s office and announce: “I think I have a bare trust!”
So how is an accountant supposed to identify these arrangements?
The answer is to ask the right questions and to seek legal help, when needed.
Two Free Resources to Help You Prepare for Tax Season
At Advotax Law, we work closely with Canadian accountants and tax preparers. We understand that identifying potential trust arrangements can be challenging, particularly when clients are unfamiliar with the legal concepts of trusts, legal ownership, and beneficial ownership.
To make the process easier, we have developed two practical resources that accountants can use when preparing for the upcoming tax filing season.
1. The 2026 Bare Trust Reporting Client Questionnaire
This questionnaire is designed to be sent directly to your clients as part of your annual tax information collection process .It uses plain language and practical examples to help clients (and their advisors) identify situations where legal ownership of property may differ from beneficial ownership.
The questionnaire is intended to help you:
Identify clients who may be involved in bare trust arrangements;
Collect relevant information before preparing their tax returns;
Recognize arrangements that may require additional review; and
Determine when further questions or legal advice may be necessary.
The questionnaire is designed for clients who have no legal or accounting background. You can include it in your annual tax organizer or send it separately to clients who may be affected by the new reporting requirements.
2. When to Call a Tax Lawyer: A Worksheet for Accountants
Not every unusual ownership arrangement is a bare trust. And not every bare trust is necessarily subject to a T3 filing obligation. Determining whether a trust legally exists, who its beneficiaries are, and whether a particular reporting exception applies may require an analysis of trust law, property law, and the Income Tax Act (Canada).
Our second resource is designed to help accountants recognize situations where a legal opinion may be appropriate. The worksheet identifies common warning signs and circumstances where involving a tax lawyer early can help avoid incorrect filings, unnecessary reporting, or missed compliance obligations.
Why Are We Sharing These Resources?
We believe that accountants (and their clients) should not be expected to resolve complicated legal questions about property ownership and trust relationships on their own. At the same time, it is often the accountant who is in the best position to identify a potential problem. After all, accountants regularly review their clients’ assets, income, corporate structures, and financial arrangements.
Our goal is to help accountants identify potential bare trust arrangements early, collect the relevant information efficiently, and recognize when legal advice is needed. If legal advice is required, the questionnaire should assist your client's lawyer in preparing for the initial consultation. The questionnaire should also help accountants to document the relevant information shared by clients.
We hope these resources will make the upcoming filing season a little easier for both accountants and their clients.
Both documents are available for free. Please feel free to download them, use them in your practice, and share them with your colleagues.
Questions About Bare Trust Reporting?
At Advotax Law, we regularly assist accountants and their clients with determining whether a trust relationship exists, identifying beneficial ownership, and assessing trust reporting obligations. If your client’s answers to the questionnaire raise questions that require legal analysis, our tax lawyers would be happy to assist.
Subscribe to our blog below, and we’ll email you the 2026 Bare Trust Reporting Client Questionnaire and the When to Call a Tax Lawyer checklist for free.
We wish all Canadian accountants and tax preparers a smooth and uneventful tax filing season!
Anna Malazhavaya
Tax Lawyer | Founder, Advotax Law
Disclaimer: These resources are intended as general information-gathering and preliminary screening tools. They do not constitute legal advice and should not be relied upon as a definitive determination of whether a trust exists or whether a T3 return must be filed. Reporting obligations depend on the applicable legislation, administrative guidance, and the particular facts of each arrangement.
