| 19(1) | File No. 5-7877 |
| G. Kauppinen | |
| (613) 957-3495 |
July 26, 1989
Dear Sirs:
This is in reply to your fax dated April 4, 1989 wherein you have indicated your belief that, as an administrative practice, a bare trust should be ignored for tax purposes where it is only an incidental aspect of what is predominantly and essentially an agency relationship.
As you may be aware, bare trusts were the subjects of a paper given by C.C. B. Darlingng of Revenue Canada, Taxation at the 1989 Corporate Management Tax Conference. Copies of this paper may be obtained from the Canadian Tax Foundation.
In this paper it was indicated that we intend to review our position regarding the taxation of bare trusts and, until this review is completed, taxpayers may rely on our published position in IT-216, IT-437 and 1. In other words, where property is transferred to a bare trust the settlor will be considered to be the owner of the property for income tax purposes.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate