Nominee Agreement Disclosure

Posted on: December 13th, 2020 by localoneway No Comments

The ASQ accepts disclosure by nominating agreement, either by the nominee or by the agent. In this context, disclosure by one of the parties to the nominated agreement is also made by the other party. The Royal Quebec Bill 42 Agreement also allows the government to publish, through the Official Gazette of Quebec, the list of mandatory transactions for which mandatory disclosure is now required. No list has yet been published. With respect to The Nominee Agreements that were executed prior to May 17, 2019, our clients should decide whether the “income tax effects” associated with such nominated agreements are maintained at or after that date. Such an analysis should be done on a case-by-case basis. As noted above, this should likely include typical nominated agreements used in the real estate sector and concluded before May 17, 2019, as long as the property was not sold before that date. If applicable, disclosure must be submitted by December 23, 2020. This is not a recurring obligation and the required form should only be submitted once. Disclosure of an appointment agreement entered into by one of the parties to the agreement is deemed to have been made by all other parties. The form must be accompanied by a copy of the Nominee agreement. The measures announced provide that parties to a nominating agreement must disclose to the ASQ the following information: more importantly, the non-disclosure of a nominating agreement entered into in connection with a transaction or a series of transactions will result in the suspension of the normal revaluation period for that transaction or a number of transactions. Late disclosure of the nomine agreement will resume the time limit.

The applicant acquires a rental property in July 2018 and still has title deeds after May 17, 2019. The economic beneficiary collects the rent and incums a fee for the property after that date and, therefore, the Nominee contract must be disclosed. Information to be disclosed to the revenue revenue includes: the date the Nominee contract was entered into; The identity of the parties to the Nominee contract; A description of the facts of the transaction, with sufficient detail to allow for an analysis of the tax consequences; The identity of another person or entity for whom the transaction has tax consequences; and a copy of the Nominee agreement. The new advertising requirement replaces the disclosure of CO-17-nominated agreements, as disclosure must now be made on Form TP-1079. PN-V has been available online since October 8, 2019 and, if applicable, must be filed separately by recommended letter, along with the Nominee Agreement, counter-letter or fictitious contract. The nominated part of form CO-17 is removed. As the Bulletin`s requirements are essentially confirmed by law, our clients should disclose all nominatable agreements affecting income tax and be concluded on May 17, 2019 of: (i) 90 days after the date of execution of the Nominee contract and (ii) December 23, 2020. According to RQ, these would be typical nominating agreements used in the real estate sector.

Given the more “secret” nature of the nominated agreements, disclosed agent relationships are generally not subject to this new disclosure obligation. Indeed, the ASQ has clearly identified three exceptions to which the disclosure obligation would not apply (unless they constitute by other means a nominee or a nominating agreement itself): the securities broker, the solicitor-client relationship or any other mandate.

Comments are closed.