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CRA’s New Scrutiny of Family Trusts: What 2026 Filings Must Include

CRA’s New Scrutiny of Family Trusts What 2025 Filings Must Include

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Canada’s trust landscape changed. Quietly at first. Then quickly. If you administer a family trust, 2026 is not the year to recycle last year’s checklist. The Canada Revenue Agency is looking deeper into who really stands behind a trust. That means more disclosure. Clear records. Better governance. And fewer shortcuts. 

 This guide walks you through what to include, what to fix, and where the tripwires are. It uses plain language. Short sentences. Practical steps. And it is written for real trustees, advisors, and family owners. Forum Estates supports families through these transitions. Use this as your working brief for the 2026 filing season. 

The big shift in one line

As per the CRA, most trusts are required to report detailed ownership beneficial information as part of the T3 return. This would be trustees, beneficiaries, settlors and some controlling persons. Such disclosure is reported in Schedule 15, and is to be filed by those trusts that must file.

What counts as “new scrutiny”

Scrutiny is not only about more documents. It is about substance. The CRA wants to see who can benefit. Who decides distributions. Who contributed property. Who has influence. And how those roles changed during the year.

Expect questions in three clusters: 

  • Identity. Legal names, addresses, tax identification numbers.
  • Control. Who can appoint or remove trustees. Who can collapse the trust. Who approves loans or guarantees.
  • Flow of value. Contributions in and distributions out. Forgiven debts. Below-market loans. Use of trust property.

Your return needs to connect these dots. The old habit of “minimal disclosure” is risky now. 

Who actually needs to file in 2026

A trust must file a T3 return if it has tax payable, disposes of capital property, or distributes income or capital to beneficiaries.  

Many family trusts fall into this net every year.  

For the 2026 filing season, you are generally filing the 2025 tax year. That return is due 90 days after the trust’s year-end. Many family trusts use a 31 December year-end. If so, the filing deadline fell at the end of March 2026. 

 There is one high-profile carve-out that created confusion. Bare trusts. The CRA announced relief for bare trusts for 2023 and 2024 tax years. If your arrangement is truly bare, the CRA did not require a T3 nor Schedule 15 for those two years unless it asked you directly.  

That relief does not convert a typical discretionary family trust into a bare trust. Most family trusts still file. (Government of Canada) 

What 2026 filings must include for a family trust

Think in layers. Start with the core T3. Then attach the schedules. Then assemble your “evidence file” to back up every line. Here is a working inventory. 

1) The T3 return

  • Trust name, account number, and year-end.
  • Residency status.
  • Income, deductions, and credits.
  • Capital gains and losses.
  • Distributions to beneficiaries.
  • Final return box if the trust wound up.
A clean T3 starts with reconciled accounting records. Do not wait for tax prep to fix your bookkeeping. Record all contributions, property moves, and distributions as they happen.

2) Schedule 15: Beneficial ownership information

This is the heart of the “new scrutiny.” You will disclose:
  • Every trustee. Legal name, address, date of birth (for individuals), and tax ID.
  • Every beneficiary. Named or described class. If you have a class of beneficiaries, spell out the description.
  • Every settlor. The person or entity that contributed property. Even small initial settlements count.
  • Any other person who can exert influence over trustee decisions. For example, a protector with a power to remove a trustee.
  • The nature of control or interest for each party.
Keep answers specific. Avoid vague job titles. If someone can veto a distribution, say so. If someone can add beneficiaries, say that too. The CRA’s guide confirms that, other than listed exceptions, trusts required to file a T3 must include Schedule 15. (Canada.ca)

3) Schedules for income, gains, and allocations

  • Schedule 1 for income and deductions.
  • Schedule 9 for capital gains and losses.
  • T3 slips for each beneficiary who received income.
  • NR4 slips if a non-resident beneficiary received amounts.
Ensure the slip totals match distributions recorded in the trust’s financials. Mismatches produce notices and delays.

4) Trustee resolution pack

Not filed. Still essential. Keep it with your records.
  • Annual resolution approving the accounts.
  • Resolution approving distributions and any loans.
  • A register of residency days for trustees if residency might be questioned.
  • Conflict of interest disclosures.
  • Banking and brokerage statements reconciling to the accounts.

5) Source documents

  • Deed of trust and all amending deeds.
  • Loan agreements, guarantees, and security documents.
  • Contribution letters and gift documents.
  • Valuations for private company shares or real property.
  • Updated beneficiary lists, including minors and contingent classes.
If you are missing an amending deed, stop and locate it. Missing deeds derail compliance checks.

Bare trusts are not your shortcut

Many families ask whether their arrangement is a “bare trust.” Most discretionary family trusts are not. A bare trust is an arrangement where the trustee has no independent power. The beneficiary calls the shots.  

The CRA’s relief for 2024 and 2025 helped joint accounts and simple title-holding setups. It did not change reporting for typical family trusts that hold a business, a cottage, or a portfolio under trustee discretion. If you are unsure, get a written characterization memo. An incorrect “bare” label invites penalties and interest. (Canada.ca) 

Penalties and risk management

Penalties exist for failing to file required returns.

There are also higher penalties where the failure relates to the beneficial ownership reporting.  

The numbers escalate fast if the failure is gross negligence. More importantly, poor records trigger audits that consume time and money. The cheapest defence is preparation. 

Adopt a risk mindset: 

  • Treat Schedule 15 as a standing project. Keep it current all year.
  • Maintain a “control map” that shows who can do what under the deed.
  • Track changes when trustees or protectors are appointed or removed.
  • Record all contributions, even small ones, with dates and source of funds.
  • Keep beneficiary addresses and tax IDs current.

Governance upgrades most trusts should make

Good governance is not just for big trusts. Small family trusts benefit the most. Here is a short list that pays for itself. 

Formalize powers and duties. Add a protector deed if you rely on informal influence. Clarify appointment and removal powers. Align your practice with the deed. 

Refresh the letter of wishes. Keep it current. Note education goals, liquidity needs, and ethical boundaries. Repeat after each family event. Marriage. Birth. Business exit. 

Establish a conflicts register. Trustees are often family members. Conflicts are normal. Disclose and minute them. Recuse where needed. 

Map data custody. Who holds the deed. Where are the minutes. Who has the password to the trust’s tax account. Create a secure folder structure and an access log. 

Schedule valuation points. Private shares. Real property. Art. Set a calendar for valuations. The numbers inform distributions and capital gains planning. 

Common mistakes we see

  • Thinking a discretionary family trust is a bare trust. It rarely is. Verify before you rely on relief.
  • Omitting a settlor who made a small contribution. The initial $10 matters. List the person and the date.
  • Treating a class description as a name. If the deed names a class, describe it properly on Schedule 15.
  • Missing a controlling person. Protectors. Appointers. A corporate parent that can direct decisions.
  • Unreconciled distributions. T3 slips do not match the books.
  • Old addresses and tax IDs. Returns bounce. Notices follow.
  • Unsigned minutes. Draft minutes are not minutes. Sign and date them.

How Forum Estates can help

Our approach is simple. Make your Schedule 15 a living document. Align the deed with your practice. Then build a rhythm of record-keeping that makes filing routine. Families gain peace of mind. Advisors get cleaner files. The CRA gets what it needs.
Our typical service pack includes:
  • Pre-season record review and data clean-up.
  • Schedule 15 mapping and control analysis.
  • T3 preparation with reconciliation tie-outs.
  • Minute book refresh and templated resolutions.
  • A trustee dashboard that tracks deadlines, documents, and actions.

Your 5-minute checklist

  • Have we drafted and verified Schedule 15.
  • Do we have current IDs and addresses for all parties.
  • Have we mapped and documented control rights.
  • Do T3 slips match the ledger.
  • Are trustee minutes signed and dated.
  • Do we have valuations to support gains and distributions.
  • If we thought we were a bare trust, did we confirm that legally.
Tick each box before you file.

Final word

The CRA’s scrutiny is not going away. The trend is toward transparency. Families that invest in clear documentation will find the new rules manageable. Those that leave it to the last minute will struggle. Start now. Close gaps early. File cleanly.

References

  • The Canadian revenue agency. What has changed - Filing a trust T3 Revised 30-1-25. Government of Canada
  • Canada Revenue Agency T3 Trust Guide -2024. Advice on beneficial ownership reportage and Schedule 15. Government of Canada

This blog is for general information only and does not constitute legal advice. Estate laws vary by situation and jurisdiction. For guidance specific to your circumstances, please consult a qualified estate lawyer. Forum Estates is not responsible for actions taken based on this content.