Bare Trust

A bare trust is an arrangement in which a trustee holds legal title to a property while one or more beneficial owners retain full beneficial interest and the right to direct all dealings with that property. In British Columbia, the trustee has no active duties beyond conveying the property as directed by the beneficial owner. The arrangement does not extinguish the beneficial owner's underlying legal and tax obligations, which continue to attach to the beneficial owner rather than the trustee.

Yes. The Land Owner Transparency Act (SBC 2019, c. 23) requires that interests held through certain arrangements, including bare trusts, be reported to the Land Owner Transparency Registry (LOTR). The reporting obligation applies to relevant corporations, trustees, and partners who hold an interest in land in BC on behalf of others. Failure to file or update a transparency declaration can result in penalties under the Act.

Under the BC Property Transfer Tax Act, PTT is generally triggered when legal title to property is transferred, including transfers into or out of a bare trust structure. Because a transfer to a bare trustee involves a change in registered ownership, PTT may be payable unless a specific exemption applies. Parties should consult the BC Ministry of Finance for guidance on any available exemptions relating to bare trust transfers, as the availability of exemptions depends on the specific facts of each transaction.

Yes. The Canada Revenue Agency (CRA) has introduced federal trust reporting rules under the Income Tax Act that require bare trusts to file a T3 trust income tax return and disclose information about trustees and beneficial owners. These rules apply to bare trusts holding BC real property, meaning beneficial owners and trustees must be aware of applicable CRA filing deadlines. Consult the current CRA guidance for the specific thresholds, exemptions, and deadlines in effect for the relevant tax year.

A licensee in BC is governed by the Real Estate Services Act (RESA) and the rules and guidance issued by the British Columbia Financial Services Authority (BCFSA). Licensees must act honestly, with reasonable care and skill, and must disclose all known material latent defects and conflicts of interest relevant to the transaction. A licensee is not qualified to provide legal or tax advice about bare trust structures and should direct clients to qualified legal and tax professionals for those aspects.

A bare trust can legally hold a strata lot in British Columbia, with the trustee appearing as the registered owner on title. However, under the Land Owner Transparency Act, the interest held through the bare trust must still be reported to the Land Owner Transparency Registry. Additionally, dealings with the strata corporation — such as obtaining a Form B Information Certificate or Form F Certificate of Payment — would be conducted in the name of the registered trustee, and parties should be aware that beneficial ownership does not appear on the strata records maintained under the Strata Property Act (SBC 1998, c. 43).

When a beneficial owner of property held in a bare trust dies, the beneficial interest in the property forms part of their estate and is dealt with according to their will or, if they die intestate, under the Wills, Estates and Succession Act (WESA) of BC. The bare trustee continues to hold legal title but must ultimately transfer or deal with the property as directed by the deceased's personal representative. Probate may be required before the personal representative can give valid directions to the trustee regarding the property.

Yes. Under BC's Speculation and Vacancy Tax Act, the beneficial owner of a property — not merely the registered legal owner — is considered the owner for the purposes of that tax. This means that a beneficial owner of a property held through a bare trust remains liable to declare and, where applicable, pay the Speculation and Vacancy Tax. Consult the BC Ministry of Finance for current exemptions, applicable regions, and declaration deadlines.

Information collected about individuals in connection with a bare trust arrangement in a real estate context may be subject to the Personal Information Protection Act (PIPA) of BC, which governs how private-sector organizations collect, use, and disclose personal information. Organizations, including real estate licensees and their brokerages, must collect only the personal information reasonably necessary for the identified purpose and must safeguard it appropriately. The information filed with the Land Owner Transparency Registry is governed separately by the Land Owner Transparency Act, which sets out its own rules about access and confidentiality.

No. The BC Property Transfer Tax Act includes provisions designed to prevent the use of bare trust or nominee structures to circumvent the Additional Property Transfer Tax applicable to foreign entities acquiring residential property in certain regions of BC. Beneficial ownership is examined, and where the beneficial owner is a foreign national or foreign-controlled entity, the additional tax may apply regardless of whether title is held by a bare trustee who is not themselves foreign. The Land Owner Transparency Act further requires disclosure of the true beneficial owners, reinforcing these anti-avoidance objectives.