Bare Trusts: Advantages and Disadvantages

Bare Trusts

A bare trust is a legal structure that facilitates the separation of legal and beneficial ownership over a property.

Generally, it's used in a real estate context. A bare trustee company is created which is a BC corporation that holds the legally registered title on the property.

The beneficial ownership remains with the person who originally purchased the property. The beneficial owner is the person or persons who continue to make all arrangements; they're responsible for leasing the property, receiving rents and reporting income.

The beneficial owner is the real owner of the property.

The bare trustee company is the one that is actually on the title, the company name is registered in the land title office (the “LTO”). From a tax perspective, the trustee company isn't going to be reporting any taxes at all because they don't actually beneficial ownership of the property.