Thousands of 'bare trust' tax forms filed despite eleventh hour pause on reporting requirement

More than 40,000 Canadians filed «bare trust» tax forms this year, despite the government hitting the pause button on the new reporting requirements at the last minute.

A bare trust relationship is one where a person has legal ownership of a property or asset but doesn't hold beneficial ownership. While some bare trust relationships can be complex, others can be rather simple — such as a shared bank account or a parent being named on the title of a child's house in order to help them qualify for a mortgage.

The new requirements were introduced as part of the government's 2022 fall economic statement and were set to be enforced this past tax season. Anyone with a bare trust was required to file a T3 tax return form naming the trustees, beneficiaries and settlors of each trust by April 2.

But in late March, with just days to go before the deadline, the Canada Revenue Agency (CRA) announced that bare trusts would no longer need to be reported this year.

Last week, Minister of National Revenue Marie-Claude Bibeau told the House of Commons that 44,034 Canadians still filed bare trust tax forms. Her statement came in response to a written question from Conservative MP Gary Vidal.

John Oakey, a vice president with the Chartered Professional Accountants of Canada, said those numbers don't surprise him. He said many of the accountants he spoke to who knew about the rule changes were preparing their clients' forms well ahead of the eleventh hour pause.

«One of the things in our profession is when it comes to preparing a trust return, we spend the early months doing all the planning,» he said.

«You don't wait until the very last minute and say, 'Well, I'm going to wait until the actual due date,' and hit send and file everything.»

The new