You may be a trustee without knowing it.

What a bare trust actually is

A bare trust exists where a trustee holds legal title to property but has no independent powers or discretion over it. They cannot act except on the instructions of the person who really owns it. Their function is to appear on the paperwork.

The distinction is between two kinds of ownership that usually travel together and here do not:

Legal title	Whose name is on the deed, the account or the registration
Beneficial ownership	Who actually owns it, benefits from it, bears the losses and controls what happens to it

For income tax the beneficial owner is generally the one who reports the income and the gain, which is why these arrangements have historically been invisible. Nothing about a bare trust changes who pays the tax. What changed was a requirement to disclose the arrangement.

The ones people do not recognize

Almost nobody sets out to create a bare trust. They arise from sensible-seeming decisions taken for reasons that have nothing to do with tax.

• A parent added to a child's mortgage or title to help them qualify, with no intention of owning the house
• An adult child added to a parent's home title, often to simplify things later or avoid probate
• An adult child added to a parent's bank or investment account for convenience, so bills can be paid if the parent becomes unwell
• A joint account where only one person contributed the money
• An in-trust-for account opened for a child or grandchild
• Property held in one spouse's name where both are understood to own it
• A corporation holding title to real estate on behalf of its shareholders, or a nominee company holding title for a partnership or joint venture. This one is deliberate and common in real estate
• Holding an asset for a business partner, or a partner holding one for you

The first three are the ones that turn up most often, and all three were done on advice that was sound for its own purpose. Helping a child qualify for a mortgage is a good deed. It may also have made you a trustee.

Where things stand

This has moved repeatedly, so the history matters for understanding what to expect.

2023	Reporting introduced. Relief announced days before the deadline. No filing required
2024	Relief extended. No filing required
2025	Relief extended again, confirmed in December 2025. No filing required
2026 onward	Certain bare trusts expected to file, for tax years ending 31 December 2026 and later

The intention to proceed was confirmed in the November 2025 federal budget, based on draft legislation released in August 2025. That legislation includes exceptions narrowing which bare trusts have to file, so the eventual requirement is expected to be narrower than the one originally introduced.

Because this has been deferred three times, it is worth confirming the enacted position rather than relying on any summary, including this one.

Why it matters even when no tax is owing

Bare trusts almost never generate tax, because the beneficial owner has been reporting the income all along. The exposure is elsewhere.

• The penalties are not tied to tax. Failure to file carries a penalty that can be measured against the value of the property in the trust rather than against tax owing. A family home in the arrangement can therefore produce a substantial penalty on a filing that would have reported no income at all
• Beneficial ownership becomes a question people have to answer. Frequently nobody has thought about it, and the answer matters for the principal residence exemption, for what forms part of an estate, and occasionally in a marriage breakdown
• There is usually no document. Adding a name to a title creates no trust deed. Establishing who beneficially owns what may mean reconstructing intent from who paid the deposit, who has made the payments, who claims the expenses and what everyone understood at the time

That last point is the real work. The filing is straightforward once you know the answer. Establishing the answer, years later, from a decision nobody documented, is not.

What a filing needs

If a bare trust does have to file, the return itself is short and the information behind it is not. The reporting asks for details of everyone connected to the trust, which is the point of the exercise.

Two practical warnings. Collecting identification numbers from adult children or elderly parents takes longer than expected and is best not left to March. And the trust account number has to exist before the return can be filed, which is a lead time rather than a formality.

What to do now

Even with no filing required for 2025, the useful step is to establish whether you have one of these at all.

1. List anything where your name and the real owner differ, in either direction. Titles, accounts, registrations
2. Work out what was intended at the time, and whether everyone involved would describe it the same way
3. Write it down, even now. A short memorandum recording what was agreed is worth a great deal more than a recollection in ten years
4. Decide whether the arrangement is still what you want. Some were sensible then and are not now, and unwinding one is a separate question with its own tax consequences

Where an arrangement affects a home, an estate plan or a business interest, this is worth doing alongside a lawyer, since beneficial ownership is a legal question before it is a tax one. See estates and final returns.

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