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Strathclyde police issued a statement on Sunday naming the 39-year-old McRae and his son Johnny as among the presumed victims.
The helicopter, registered to 1995 world champion McRae, came down near his home on Saturday and burst into flames.
"It has now been confirmed that there were four people, two adults and two young children on board," the police statement said.
"The post mortem has still to take place but the four involved are believed to be Mr. Colin McRae (39) of Jerviswood House and his son Johnny Gavin McRae, aged 5, Ben Porcelli (6), of Cleghorn Road, Lanark, who had been over playing with Johnny, and family friend Graeme Duncan (37), of L'Ile Degaillot, Faycelles, France."
McRae was the first British driver to win the World Rally championship. The second, Richard Burns, died two years ago from a brain tumour.
Chief Superintendent Tim Love of Strathclyde Police said, "We believe that the group were just returning from a visit to the nearby village of Quarter around 1605 hours, when it appears that the helicopter got into difficulty and crashed within the grounds of Mr McRae's family home."
McRae, the son of five-times British rally champion Jimmy, was a big figure in British motorsport with his swashbuckling driving style and won the title driving for Subaru in 1995.
He was runner-up in 1996 and 1997 and again with Ford in 2001 when he was pipped to the title by Burns.
On Sunday, tributes poured in from the motorsport world. Former Subaru boss and World Rally supremo David Richards said McRae had "extraordinary spirit".
"It was a competitive spirit like I've never seen in any other individual in my life that could say 'I can do anything'," Richard told reporters from the Belgium Formula One Grand Prix.
"It's unusual to call somebody a legend but it's very appropriate for Colin."
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F1 driver and close friend David Coulthard, racing at the Belgium GP, said McRae's death was a "terrible blow".
"He was fearless, flamboyant, blindingly quick in the car. He was very down-to-earth, matter-of-fact that he was so good. He had all the good Scottish traits," Coulthard said.
McRae began his rally career in 1986 on the Scottish circuit, honing the skills that would earn him 25 career victories in the World Rally Championship (WRC).
McRae made his WRC debut in 1987 at the Swedish rally but his career took off when he joined the Subaru team in 1991. He was British champion in 1991 and 1992 and made his breakthrough on the world stage in 1993 when he won the New Zealand Rally.
In 1995 he took the world title on home soil in the last event of the season, edging out Subaru team mate Carlos Sainz. He moved to the Citroen team in 2003 but struggled to a disappointing seventh in the championship.
McRae competed in other forms of motorsport, namely the Paris-Dakar Rally and the Le Mans 24-hour race. He also tested in F1.
He made a brief return to the WRC in October last year, replacing defending champion Sebastian Loeb in the Citroen team for the Rally of Turkey, the 146th of his career, after the Frenchman broke his arm in a bicycle accident.
McRae, who was married to Alison and also had a daughter Hollie, was awarded the MBE in 1996.