LEEWARD TAX
Practical Canadian tax updates for Ontario families and businesses
WEEKLY BRIEFING | 13 OCTOBER 2026
COVER STORY
Who Really Owns
the Account?
CRA's 2026 bare-trust rules may reach everyday family arrangements - even when nobody thinks of the account, home or investment as a trust.
Everyday convenience can create a trust-reporting question
A parent added to a property title, an adult child helping an aging parent with a bank account, or one person holding an asset for another may create a bare-trust question. The label on the arrangement is less important than who legally owns the asset and who receives its benefit.
CRA updated its guidance on 5 October. Bare trusts do not have to file for the 2024 or 2025 taxation years, but certain reportable bare trusts may have to file for taxation years ending on or after 31 December 2026. A year-end ownership review is therefore timely.
2 PARTS
T3 return and Schedule 15
90 DAYS
Calendar-year filing window
HIGHEST FMV
Value test during the year
Common arrangements to review
ARRANGEMENT | LEGAL OWNER | WHO BENEFITS | INITIAL DIRECTION |
|---|---|---|---|
Child helps with parent's bank account | Parent + child | Parent | Bare-trust analysis |
Parent helps child finance principal home | Parent + child | Child | Often excluded |
Nominee holds rental or investment asset | Nominee | Another party | Possible T3 filing |
Both joint owners use the funds | Both owners | Both owners | Generally excluded |
The facts, legal rights and applicable exceptions determine the result; the table is only an initial screening guide.
Bare Trust Review: Your Year-End Checklist
What is a bare trust?
A bare trust generally exists when one person is named as the legal owner of an account, title or registration, another person has the use and benefit of the property, and the legal owner acts only as the beneficial owner's agent.
Common family situations
Review arrangements such as:
An adult child added to a parent's account only to help pay bills.
A family member added to title only to help obtain financing.
One person holding an investment or other property for someone else.
A document labelled 'trust' is not required. The legal relationship, control and entitlement to the property matter.
VALUE EXAMPLE
CRA illustrates an adult child named on an aging parent's account solely to assist. At a highest annual value of $16,000, no T3 was required; when the account later reached $310,000, the applicable value threshold was exceeded. Test the highest fair market value during the year - not only the 31 December balance.
Many ordinary arrangements are excluded
Examples include a joint account where every legal owner is also entitled to the funds, and a related parent on title solely to help a child acquire a principal residence when the stated conditions are met.
A home occupied by spouses may also qualify for an exclusion even when only one spouse is on title. These family-home exclusions focus on a principal residence; rental, investment and business property should be reviewed separately.
If a filing is required
File a T3 Trust Income Tax and Information Return.
Complete Schedule 15 with beneficial-ownership information.
Continue reporting income, gains and losses to the beneficial owner.
For a calendar-year trust, plan for 31 March 2027.
Set up the trust account and gather identification details early enough to avoid a last-minute filing problem.
Lee CPA year-end checklist
List accounts and properties where legal and beneficial ownership differ.
Document why another person's name was added.
Confirm who can use the income and capital.
Record the highest 2026 value and test available exclusions.
Documents to gather now
OWNERSHIP
Title, registration and account records.
PURPOSE
Notes showing why each name was added.
VALUE
Support for the highest 2026 fair market value.
IDENTITY
Trustee, settlor and beneficiary details.
BOTTOM LINE
A name added for convenience can still have reporting consequences. Review legal and beneficial ownership before year-end, while records and explanations are easy to collect.
This Week in Canadian Tax
CORPORATE TAX
Small-business carbon rebate is tax-free - but some T2 returns may need correction
Legislation enacted on 26 March 2026 makes the Canada Carbon Rebate for Small Businesses non-taxable for all applicable fuel-charge years. The CRA is reviewing previously filed T2 returns to identify corporations that included the rebate in taxable income.
For a T2 filed before 30 June 2025, the CRA may adjust the return automatically when the rebate was clearly included on line 295 of Schedule 1, or contact the corporation when the treatment is unclear. A corporation that filed after that date and included the rebate should request a reassessment.
Compare the notice and bank deposit with the T2 filing before making an adjustment. Eligible CCPCs that filed their 2023 return after 15 July but by 31 December 2024 are expected to receive a retroactive payment in fall 2026; the 2024-25 payment is the final rebate payment.
PERSONAL TAX
Your refund is not the last word: CRA reviews now continue year-round
Since April 2026, the CRA has conducted post-assessment reviews throughout the year. Receiving a refund and notice of assessment does not prevent the agency from later asking for documents supporting an amount on the return.
A return may be selected because information differs from a slip, a deduction or credit needs support, the taxpayer has a compliance history, or the return is chosen randomly. A review request is not automatically an audit.
Keep supporting records for at least six years, including receipts and proof of payment for medical, child-care, donation, moving, rental and foreign-tax claims. Monitor CRA My Account and mail, and reply by the stated deadline.
IMPORTANT DEADLINE
15 October 2026 | Payroll remittance
Regular remitters generally must send September source deductions by Thursday, 15 October. Eligible quarterly remitters generally remit deductions for 1 July through 30 September on the same date. Confirm the employer's remitter type because accelerated remitters follow different schedules, and submit a nil remittance when required.
THIS WEEK'S CHECK | Review legal-versus-beneficial ownership, verify carbon-rebate treatment and make the 15 October payroll remittance on time.
Tax Court Highlight
YANTA v. THE KING, 2026 TCC 173
Foreign treatment qualified.
The travel costs did not.
Eligible medical care abroad does not automatically make the airfare and accommodation deductible.
TREATMENT
ALLOWED
TRAVEL DENIED
REASONABLENESS TEST
The facts
A North Bay taxpayer claimed medical expenses connected with his spouse's dental implant treatment in Antalya, Türkiye. The CRA allowed the foreign dental-treatment fees but denied the airfare and accommodation.
The Court's decision
The Tax Court dismissed the appeal. Similar treatment was available in Toronto and other Canadian centres, so travelling thousands of kilometres to Türkiye was not reasonable for the medical-travel provisions.
Foreign practitioner fees may qualify on their own.
Transportation generally requires 40 kilometres or more.
Other travel expenses generally require 80 kilometres or more.
Equivalent services must be unavailable locally and the route reasonable.
Why the decision matters
Medical treatment and travel are tested separately. Lower overseas cost, by itself, does not establish that the related travel was reasonable or that equivalent care was unavailable closer to home.
Get a referral or written evidence that equivalent care is unavailable locally.
Research and document the nearest location offering comparable treatment.
Keep appointments, invoices, travel receipts and the route taken.
Obtain medical certification when a companion is required.
Qualifying care does not guarantee qualifying travel.
This week's action list
Review joint accounts and property titles for bare-trust exposure.
Check the corporate T2 treatment of any carbon-rebate payment.
Preserve tax receipts even after receiving a refund.
Remit September or quarterly payroll deductions by 15 October.
Document medical-travel decisions before booking the trip.
Escalate uncertain ownership or trust questions for legal review.
This newsletter provides general information only and is not legal, accounting or tax advice. Tax outcomes depend on the facts and applicable law; obtain advice for your circumstances.