After stating that "the categorization of the Nominee as an active or bare trust is significant as it dictates who, between the Beneficial Owner and the Nominee, will be required to account for GST/HST under Part IX and thus who will be required to report tax with respect to the Projects," CRA went on to indicate that the nominee corporation in question was a bare trustee rather than the trustee of an active trust. CRA comments included:
[T]he beneficiaries of a bare trust would generally be considered to be engaged in commercial activities relating to the trust property. The beneficiaries would be viewed as conducting the activities relating to the trust property and would be required to register for GST/HST purposes unless an exception applied, such as the small supplier rule. They would be required to account for the GST/HST to the extent of their share of the trust property … .
[I]f the Nominee is a bare trustee, it would be not be considered as engaged in the commercial activities relating to the trust property and would therefore not be entitled to ITCs on expenses relating to the trust property. The Beneficial Owners would in that case be entitled to claim those ITCs.
