I-3 - Taxation Act

Section 1120.1 Disposition versions

2009-05-15

1120.1. Where, at any time, it may reasonably be considered that a trust, having regard to all the circumstances, including the terms and conditions of the units of the trust, was established or exists primarily for the benefit of persons not resident in Canada, the trust is deemed not to be a mutual fund trust after that time unless

(a)  at that time, all or substantially all of its property is property other than property that would be taxable Canadian property of the trust if section 1094 was read without reference to its paragraph b; or

(b)  the trust has not issued any units, other than units referred to in the second paragraph, after 20 February 1990 and before that time to a person who, after reasonable inquiry, it had reason to believe was not resident in Canada, except where the units were issued to that person under an agreement in writing entered into before 21 February 1990.

The units to which subparagraph b of the first paragraph refers are the following:

(a)  a unit issued to a person as a payment of an amount out of the trust’s income determined before the application of sections 657 and 657.1, or out of the trust’s capital gains; or

(b)  a unit issued to a person in consideration for the person’s right to enforce payment of an amount out of the trust’s income or capital gains referred to in subparagraph a.

1993, c. 16, s. 354; 1996, c. 39, s. 273; 2004, c. 8, s. 197; 2009, c. 5, s. 508.

2006-03-01

1120.1. Where, at any time, it may reasonably be considered that a trust, having regard to all the circumstances, including the terms and conditions of the units of the trust, was established or exists primarily for the benefit of persons not resident in Canada, the trust is deemed not to be a mutual fund trust after that time unless

(a)  throughout the period that begins on the later of 21 February 1990 and the day of its creation and ends at that time, all or substantially all of its property consisted of property other than property that would be taxable Canadian property of the trust if section 1094 were read without reference to paragraph b thereof; or

(b)  the trust has not issued any units, other than units referred to in the second paragraph, after 20 February 1990 and before that time to a person who, after reasonable inquiry, it had reason to believe was not resident in Canada, except where the units were issued to that person under an agreement in writing entered into before 21 February 1990.

The units to which subparagraph b of the first paragraph refers are the following:

(a)  a unit issued to a person as a payment of an amount out of the trust’s income determined before the application of sections 657 and 657.1, or out of the trust’s capital gains; or

(b)  a unit issued to a person in consideration for the person’s right to enforce payment of an amount out of the trust’s income or capital gains referred to in subparagraph a.

1993, c. 16, s. 354; 1996, c. 39, s. 273; 2004, c. 8, s. 197.