{"id":15692,"date":"2020-10-02T00:00:00","date_gmt":"2020-10-02T00:00:00","guid":{"rendered":"https:\/\/gascon.ca\/have-you-disclosed-your-nominee-agreements\/"},"modified":"2020-10-02T00:00:00","modified_gmt":"2020-10-02T00:00:00","slug":"have-you-disclosed-your-nominee-agreements","status":"publish","type":"post","link":"https:\/\/gascon.ca\/en\/have-you-disclosed-your-nominee-agreements\/","title":{"rendered":"Have you disclosed your nominee agreements?"},"content":{"rendered":"\n

This article is an update on a BloG article published on August 26, 2019,<\/a> which dealt with the announcement made by the Qu\u00e9bec Minister of Finance to amend the tax legislation and impose certain measures designed to counter aggressive tax planning in the context of the action plan to ensure tax fairness.<\/p>\n\n\n\n

Among these measures, the Minister announced that the tax legislation would be amended to provide that parties to a nominee agreement have the obligation to disclose such agreement.<\/p>\n\n\n\n

This obligation to disclosure was postponed to a later date calculated as of the date of assent of the new legislation. <\/p>\n\n\n\n

As such, the Act \u201cto give effect to fiscal measures announced in the Budget Speech delivered on 21 March 2019 and to various other measures\u201d, was sanctioned on September 24, 2020. <\/p>\n\n\n\n

Scope of a nominee and extend of the measure<\/h3>\n\n\n\n

A nominee agreement is an agreement under which a mandate is vested to a corporation or person. Under this mandate, the nominee is entitled to execute certain obligations and retain certain responsibilities for and on behalf of the principal (person who confers a mandate on another). Since the Act does not provide for a definition of the concept of a nominee, we therefore, believe that we should rely on the definition available under the Qu\u00e9bec Civil Code. <\/p>\n\n\n\n

The main objective of this agreement is usually to protect the identity and\/or responsibility of the principal. Under the Act, the disclosure obligation applies to all nominee agreements entered into on or after May 17, 2019<\/strong>.<\/p>\n\n\n\n

Thus, the disclosure must be made for any nominee agreements entered into before May 19, 2019, \u201cif the tax consequences of the transaction or series of transactions to which a nominee agreement relates have an impact on or after May 17, 2019\u201d. The Act does not provide for any time limit for the implementation of this measure. Thus, as long as the tax consequences of the transaction continue to have an impact on or after May 17, 2019, the disclosure obligation also applies to the contract concluded.<\/p>\n\n\n\n

A disclosure form must be completed for each <\/strong>contract and transmitted under separate cover<\/strong>. Depending on the disclosure form to be used, the Minister exempts the requirement to disclose a nominee agreement if a person meets the following requirements: i) a nominee agreement is executed between an individual and a related person, ii) at the request of a financial institution or iii) for the sake of financing the purchase of an immovable by the individual and that such purchase is intended for his personal use, and iv) the related person co-signs up to 50% of the immovable\u2019s fair market value.<\/p>\n\n\n\n

Delays to disclose <\/h3>\n\n\n\n

The parties to the nominee agreement must disclose the agreement on or before: <\/p>\n\n\n\n