Let’s say your name is on your mother’s bank account. Or your company’s building is registered to a numbered nominee company. Or maybe your daughter is listed on your cottage’s title. Arrangements like these are often bare trusts and for the first time, many of them must be reported to the CRA.

What a bare trust looks like

A bare trust exists when one person holds legal title to property but someone else is functioning as the real owner. The person on title has no independent say over property management or ownerships. They act only on the owner’s instructions, much like an agent, and must hand the property back on request. No trust deed is needed, and the word “trust” may never have been used.

Some common family scenarios are:

• An adult child added to a parent’s bank or investment account to help pay bills, but the money remains the parent’s
• An “in trust for” account opened for a child or grandchild. (If the money was a gift, it may instead be an ordinary trust with its own filing rules though).
• A child put on title of a parent’s cottage or rental property
• A parent on title of an adult child’s home to help with a mortgage

And common business scenarios include:

• A nominee or “bare trustee” corporation holding title to real estate for an operating company, holding company, partnership or group of investors
• Private company shares registered to one person but owned by another
• Vehicles, equipment or property registered to a shareholder but owned by the corporation, or vice versa
• A joint‑venture or development property held by one party for unrelated co‑owners

Whether an arrangement is a bare trust at all depends on a few key facts, but the CRA will not make that call for you. A quick review of your particular situation with your Melo advisor can determine whether you have a bare trust or not. Follow these steps to get started.

Step 1: Spend ten minutes with your records

Review property tax bills, account statements and corporate minute books, then ask:

• Is anyone else’s name on my bank, investment or brokerage accounts, or is mine on theirs?
• Have I opened an “in trust for” account for a child or grandchild?
• Is anyone else on the title to my home, cottage or rental property who does not pay for it? Am I on title to property that isn’t really mine?
• Does my company hold real estate through a nominee or title‑holding corporation?
• Are any shares of my company registered in someone else’s name?
• Are vehicles, equipment or property registered personally but owned by the business, or vice versa?
• Am I in a joint venture, co-ownership or development where one party holds title for the others?
• Has a past reorganization, purchase or estate freeze left assets in a name that no longer matches the real owner?

A yes to any of these means you should have a conversation with us.

Step 2: Consult with Melo to determine if an exception applies

Having a bare trust doesn’t necessarily mean you have to file. Three main exceptions will cover a great many family and small‑business arrangements.

Step 3: Test the status of your trust annually

Trust exemption status is checked year by year. A bare trust account or arrangement that qualifies in 2026 can fail in 2027 if a large deposit lands in it, or the situation otherwise changes, so this is not a one‑time review. Consult with Melo if your arrangements change.

Penalties for non‑compliance

A required return that isn’t filed costs $25 a day, up to $2,500. If a return is skipped or left incomplete knowingly or through gross negligence, the penalty can jump to 5% of the property’s highest value in the year, which can be a substantial amount.

Talk to your Melo advisor

The 2026 tax year closes on December⁠ 31. Whether or not you have a bare trust is best determined before 2027.

If it is genuinely unclear whether your bare trust requires filing, we generally recommend filing or obtaining a legal opinion.

Contact your Melo advisor as soon as possible. One short meeting now can determine if you need to file, saving you headaches later.

Preventing bare trust issues

This article is general information based on the rules in effect on October⁠ 26,⁠ 2026. It is not tax or legal advice. Whether an arrangement is a trust depends on its facts and on provincial law, so please speak with your Melo advisor before acting.