{"id":145,"date":"2012-10-15T17:19:43","date_gmt":"2012-10-15T17:19:43","guid":{"rendered":"https:\/\/thor.ca\/\/blog\/?p=145"},"modified":"2025-02-12T13:29:35","modified_gmt":"2025-02-12T21:29:35","slug":"cra-reassesses-bare-trustee","status":"publish","type":"post","link":"https:\/\/www.thor.ca\/blog\/2012\/10\/cra-reassesses-bare-trustee\/","title":{"rendered":"CRA reassesses bare trustee"},"content":{"rendered":"<p>One of the simplest business structures involves one party (typically a company) holding legal title for and on behalf of the true beneficial owner (in a group).\u00a0 This can be done for various reasons, both tax and non-tax related.\u00a0 The holder of the legal title \u2013 typically called a \u201cbare trustee\u201d, \u201cnominee\u201d, or \u201cmere agent\u201d \u2013 is disregarded for income tax purposes.\u00a0 Surprisingly, in <em>Peragrine v. The Queen<\/em> (2012 TCC 348, released October 10), the CRA reassessed a bare trustee in relation to a gain realized on real estate held in the bare trustee\u2019s name, even though a written agreement was in place (evidencing the relationship) and no evidence indicated that the bare trustee received any of the sale proceeds.\u00a0 Fortunately, the Tax Court soundly rebuffed this reassessment in a thorough judgment that usefully reviews the common law.\u00a0 A bare trustee (or nominee or mere agent) relationship exists where the person holding title has no independent powers, discretions or responsibilities; his only responsibility is to carry out the instructions of the beneficial owner.\u00a0 This common law principle also appears in s. 104(1) of the <em>Income Tax Act<\/em> (Canada), which further clarifies that a bare trustee is generally ignored for income tax purposes.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>One of the simplest business structures involves one party (typically a company) holding legal title for and on behalf of the true beneficial owner (in a group).\u00a0 This can be done for various reasons, both tax and non-tax related.\u00a0 The&hellip;<\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-145","post","type-post","status-publish","format-standard","hentry","category-corporate-tax"],"_links":{"self":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/145","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/comments?post=145"}],"version-history":[{"count":1,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/145\/revisions"}],"predecessor-version":[{"id":2857,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/145\/revisions\/2857"}],"wp:attachment":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/media?parent=145"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/categories?post=145"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/tags?post=145"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}