New tax measures regarding Nominee agreements and Sham transactions
Planiprêt | 17 September 2019
The parties to a nominee agreement, but for some exceptions, must disclose pertinent information and the facts surrounding the transaction through a prescribed form. Since this form is not yet available, the disclosure can be made in a letter and sent to Revenu Québec.
The pertinent information related to a nominee agreement must be disclosed to the later of the following dates:
• 90 days following the conclusion of the nominee agreement; or
• 90 days following the day of the enactment of the tax bill introducing the new measures.
If the disclosure is not filed on time, the parties involved are jointly responsible for a penalty of $1,000 and for an additional penalty of $100 per day, up to a maximum of $5,000, starting on the second day of the omission.
If you entered into a nominee agreement or if you plan to enter into one, among other things, in the following real estate transactions:
• Purchase of a principal residence or other property for personal use ;
• Purchase of an income property ;
• Purchase of a real estate property by or with a non-resident of Canada;
• Real estate transactions in the event of a divorce or separation, or in the event of death ; and
• Other transactions not mentioned above,
As mortgage brokers, we are not authorized nor qualified to discuss this matter further. Therefore, we strongly suggest that you consult a tax specialist who is familiar in this area, to properly identify all the tax consequences arising from your nominee agreement and to ensure that you are in good standing with Revenu Québec.
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