Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: Is it possible for husband and wife who are joint owners of property to transfer that property to a bare trust?
Position: Yes, provided the criteria set out for a bare trust are met.
Reasons: Meeting the criteria is determinative of the issue.
972946
XXXXXXXXXX T. Murphy
(613) 957-8953
March 10, 1998
Dear Sir:
Re: Bare Trusts and Interpretation Bulletin IT-216
This is in reply to your letter dated November 2, 1997 concerning the above-noted subject. We apologize for the delay in responding to your letter.
It appears that the interpretation you seek relates to specific taxpayers and actual past and proposed transactions. We, therefore, bring to your attention Information Circular 70-6R3 dated December 30, 1996 issued by Revenue Canada. The review of actual transactions which have already been implemented falls within the responsibility of the tax services offices. Confirmation with respect to proposed transactions involving specific taxpayers will only be provided in response to a request for an advance income tax ruling submitted in accordance with the parameters set out in the Information Circular. Nevertheless, we can offer the following general comments.
Generally, where a husband and wife are joint owners of property and they transfer the property to a trust with a numbered company as trustee wherein:
- they will jointly make decisions and the trustee has no significant powers or responsibilities and takes no action without their instructions;
- the only function of the trustee is to hold legal title; and
- the property may revert to the joint owners upon their request;
the trust would be considered to be a bare trust.
The above comments represent our general views and as outlined in paragraph 22 of Information Circular 70-6R3, they do not constitute an advance income tax ruling and they are not binding on Revenue Canada.
We trust our comments will be of assistance to you.
Yours truly,
R.S. Biscaro, CA
Director
Resources, Partnerships and Trusts Division
Income Tax Rulings and Interpretations Directorate
Policy and Legislation Branch
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