What Is A Bare Trustee Agreement

Registration or cancellation generally has no influence on the use of property held in a simple trust. Over the years, there has been much discussion about the real role of a trustee, perhaps even more so in terms of a simple trust. Within the legal community, there is still no unanimity on the nature of the relationship between the trustee and the beneficial owner. However, a change in use may occur if the beneficial owner of the property held in a simple trust carries on tax-exempt activities and the simple trust can carry on exclusively commercial activities. For GST purposes, if a transaction is made by the trustee as an undisclosed agent, the beneficial owner as principal is responsible for collecting and transferring tax on the accepted delivery to the agent, while the agent`s GST liability exists in respect of the accepted delivery to a third party. Characterizing the relationship that dominates the Trust becomes of important importance in determining who is to be registered between the beneficial owner and the trustee for the purposes of Part IX of the Excise Duty Act (the “Act”) and who is therefore responsible for the GST for supplies related to trust property. In this situation, all powers and responsibilities to manage and/or dispose of the asset would likely be reserved for the beneficial owner in the trust document. Therefore, the latter, and not the mere trustee or trustee, would be involved in commercial activities related to the property. Unless the beneficial owner is eligible for small supplier status or one of the above exceptions, registration under the law would be required. If there is more than one beneficiary of the trust, the small provider threshold is calculated on an individual basis, each being a person within the meaning of the law, unless the beneficiaries are related persons within the meaning of the law. One of the ways in which investment products (including mutual funds, segregated funds, guaranteed investment certificates and other proof of deposit) distributed by an issuer or its agent are considered to be held in an acceptable place of securities is for the issuer or its agent to sign a mandatory custody agreement with IIROC. The holding agreement contains the conditions for depositing such securities and contains provisions that no use or sale of the securities may take place without the prior written consent of the trading member and that the securities may be delivered to the trading member without undue delay upon request. IIROC entered into these agreements on behalf of its members to reduce the need for the issuer or its representative to enter into individual agreements with each trading member with which it is required to deal.

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