Notwithstanding the agency report, case law has maintained the “sealed contract” rule, which protects an unse mentioned client from liability if a simple agent or nominee signs a contract, for example. B a mortgage on immovable property considered to be a contract sealed under the Land Reform Act1. For this reason, it is essential to include a beneficial ownership agreement as part of the security package when an asset is held in trust by a nominee or trustee for third party beneficiaries. In essence, the transfer of an asset to mere trust is the same as a direct gift to a person. However, instead of transferring legal ownership to what happened, the donor transferred it to a third party (or perhaps acts himself as a mere agent). An exception could be made where parents have transferred income-generating property to a cash trust for minor children. In Quebec, where the Civil Code applies (unlike customary law in all other provinces and territories), a nominee can be called a “nominee” (literally a “borrowed name”) and is subject to the rules of the Civil Code. Why use a simple agent to own a registered property of the land? Nominee shareholders always have a place and can be a very valid way to structure a company, avoid the total glare of legislation and manage your affairs as you think. For now, it`s still a solid way to structure a company that we create every day at Coddan Formations Agency.
But in the future, simple trust can be a more popular, convenient, and effective way to structure your business. This article provides a very broad overview of the nature of trusts and why they are sometimes used in the context of real estate ownership. If you are considering buying or lending money secured by real estate, please contact a member of the Houser Henry & Syron LLP team to discuss how best to structure your transaction. Should lenders ensure that registered ownership of land is held by a mere agent? Note that the recent tax procedure confirmed that a simple trust does not need to be created by a written agreement. Simple trust lies somewhere between real trust and property. It passively holds assets or shares under the control of agents, with a designated beneficiary being responsible for income and capital gains tax liabilities. However, when one door closes, another opens. Many of those who have worked under the relative security of a nominee can now turn to a simple trust. This simple trust holds shares in the name of a beneficiary who is then responsible for the tax. Capital gains tax must be paid on the profits of assets held in trust. Who is taxable? For tax purposes, a simple agent or nominee is almost always ignored, and the beneficial owner of the property (O) is considered the owner and takes care of it….