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Now is an opportune time to briefly indicate that despite changes to trust reporting rules in the federal Income Tax Act (“ITA”) brought by Bill C-15 passed earlier this year for tax filings for 2026 due mostly at the end of March 2027, standard Quebec nominee (prête-nom) agreements do appear to continue to be seen as contracts of mandate (not as trusts) that are therefore not subject to the filing of a federal T3 trust tax return and the Quebec equivalent. The situation for such standard Quebec nominee (prête-nom) agreements therefore appears to remain unchanged as compared to matters as they stood in February 2024 when a CRA technical interpretation (2024-1006681E5 and 2024-1006721E5F) indicated that for the most part a trust is needed under applicable private law in order for a trust return to be required under the ITA. I had blogged on that Technical Interpretation in 2024 (at STANDARD QUÉBEC PRÊTE-NOMS NOT SUBJECT TO NEW TRUST REPORTING REQUIREMENTS - Spiegel Ryan).

To add some additional detail to this brief review: it is possible for a trust to be established in Quebec without using the typical “trust patrimony” language referred to in the Civil Code of Quebec, for example there is a Quebec Court of Appeal decision by then QCA Justice Nicholas Kasirer (Groupe Sutton-Royal Inc. (Syndic de), 2015 QCCA 1069) that acknowledges that Quebec recognizes implied trusts, and a corollary of that is that a Quebec trust theoretically is not necessarily required even to be constituted in writing. There might be an issue that a purported Quebec trust not using trust patrimony language has not been set up with an independent trustee (as required by article 1275 of the Civil Code of Quebec), but there are some cases that have said said things like a Quebec trust should not fail for want of a trustee (a basic common law principle) and that there is therefore the ability of a court to appoint an independent trustee. All this to say that the abovementioned February 2024 CRA technical interpretation apparently upholding Victuni v. Minister of Revenue of Quebec, [1980] 1SCR 580 to the effect that a Quebec nominee agreement is a contract of mandate that is a prête -nom/nominee agreement and not a trust for purposes of the ITA, was very welcome. Finance Canada’s technical notes to the 2026 changes under Bill C-15 to the trust reporting rules essentially to the effect that the 2026 changes are aimed at narrowing what is a reportable bare trust in the common law provinces, and what appears to be the repetition of the abovementioned February 2024 CRA technical interpretation in the CRA’s October 2026 update to its frequently asked questions on the enhanced trust reporting rules (at question 3.7), are also very welcome. Therefore, despite it being possible for a Quebec trust to not use trust patrimony language, we can say that apparently a standard prête-nom/nominee agreement in Quebec is not subject to the trust reporting rules.

Some additional detail on this matter is in my article on the trust reporting rules (comparing some differences in the rules under the Federal and Quebec tax legislation and under common law vs. civil law) just published in the APFF’s Stratège journal.

It is important however that any particular contract or other arrangement be individually assessed by us to evaluate whether or not it establishes a trust. Therefore, please do be in touch with us if you have any questions on this matter, or to obtain details beyond this brief summary.