Bare trusts have traditionally been used as part of overall tax planning and to meet various other business objectives. In fact, they are often used to help reduce the overall tax burden that occurs on the transfer of ownership of real property. However, the usefulness and benefit of bare trusts in real estate transactions has recently been called into question.

Carole James stated in the Finance News Release of July 25, 2018 (News Release), “Our government has been clear that the days of skirting tax laws and hiding property ownership behind numbered companies and trusts are over.”

Effective September 17, 2018, the new property transfer tax return that must be prepared for all property transfers will require people to report additional information when a transaction is structured through a corporation or trust. According to the government, the intent of the change is to identify people with a significant interest in the property.

Review the full reporting requirements that apply to all types of property, including commercial and residential.