Recommendations of the Trust Reporting Working Group of the Joint Committee on the amendments in August 12, 2024 Technical Amendments package to ss. 150(1.2) to (1.31) and related existing provisions include:
- The exception in s. 150(1.2)(a) for trusts that had been in existence for less than three months at the end of the year should be explicitly extended to trusts that were created and wound-up within three months at any time in the year.
- The exception in s. 150(1.2)(b.1) for trusts with related trustees would not extend to trusts with other family trustees such as aunts or nephews, and the permitted assets should be expanded to include near-cash items (such as gold coins), GICs of credit unions and listed limited partnership units.
- Regarding the requirement respecting the exception in s. 150(1.2)(c) for lawyer trust accounts that, if the trust account is held for a specific client, the only asset must be “money” not exceeding $250,000, the “money” concept should be expanded to near-cash assets.
- The exception in s. 150(1.2)(n) for Canadian registered plans should be extended to exempt foreign plans (e.g., IRC 529 plans, 401(k)s, or Roth IRAs) or exempt retirement compensation arrangements.
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It is suggested that the deemed express trust rule in s. 150(1.3) is overly broad and might extend to landlord/tenant or licensor/licensee relationships under which one party can act as agent for the other in relation to property held by it.
Regarding the draft Technical Bill exceptions from s. 150(1.3) contained in s. 150(1.31):
- The exception in s. 150(1.31)(a) for where each deemed beneficiary is also a legal owner and there are no legal owners that are not deemed to be beneficiaries seems not to apply once a legal (and beneficial) owner dies or in the situation of a “Sawdon” arrangement, under which individuals with legal ownership may not acquire beneficial ownership until the passing of someone (e.g., a parent); or of a “Pecore” arrangement, where the transfer of legal ownership might create a resulting trust in favor of the transferor with the transfer of beneficial ownership occurring on the death of the transferor.
- Regarding the exception in s. 150(1.31)(d) for property held for a partnership where inter alia the property is held throughout the year for the partnership, the property is legally owned by a general partner and the partners generally are required to file information returns, the “throughout the year” requirement should be removed.
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