I-3 - Taxation Act

Section 21.0.7 Disposition versions

2017-12-07

21.0.7. For the purposes of paragraph b of section 21.0.6, a person is deemed not to become a majority-interest beneficiary, and a group of persons is deemed not to become a majority-interest group of beneficiaries, of a particular trust solely because of

(a)  the acquisition of equity of the particular trust by

i.  a person from another person with whom the person was affiliated immediately before the acquisition,

ii.  a person who was affiliated with the particular trust immediately before the acquisition,

iii.  a succession from an individual, if the succession arose on and as a consequence of the death of the individual and the succession acquired the equity from the individual as a consequence of the death, or

iv.  a particular person from a succession that arose on and as a consequence of the death of an individual, if the succession acquired the equity from the individual as a consequence of the death and the individual was affiliated with the particular person immediately before the death;

(b)  a variation in the terms of the particular trust, the satisfaction of, or failure to satisfy, a condition under the terms of the particular trust, the exercise by any person of, or the failure by any person to exercise, a power, or, without restricting the generality of this paragraph, the redemption, surrender or termination of equity of the particular trust at a particular time, if each majority-interest beneficiary, and each member of a majority-interest group of beneficiaries, of the particular trust immediately after the particular time was affiliated with the particular trust immediately before

i.  the particular time, or

ii.  in the case of the redemption or surrender of equity of the particular trust that was held, immediately before the particular time, by a succession and that was acquired by the succession from an individual as described in subparagraph iii of paragraph a, the individual’s death;

(c)  the transfer at a particular time of all the equity of the particular trust to a corporation, partnership or another trust (in this paragraph referred to as the “acquirer”), if

i.  the only consideration for the transfer is equity, determined without reference to paragraph d of the definition of “equity” in the first paragraph of section 1129.70, of the acquirer,

ii.  at all times before the particular time the acquirer held no property or held only property having a nominal value, and

iii.  immediately after the particular time the acquirer is neither

(1)  a subsidiary of any person, nor

(2)  a corporation controlled, directly or indirectly in any manner whatever, by a person or group of persons;

(d)  the transfer at a particular time of equity of the particular trust to a corporation, partnership or another trust (in this paragraph referred to as the “acquirer”), if

i.  immediately before the particular time a person was a majority-interest beneficiary, or a group of persons was a majority-interest group of beneficiaries, of the particular trust,

ii.  immediately after the particular time the person, or group of persons, as the case may be, described in subparagraph i in respect of the particular trust, and no other person or group of persons, is

(1)  if the acquirer is a corporation, a person by whom, or a group of persons by which, the corporation is controlled directly or indirectly in any manner whatever,

(2)  if the acquirer is a partnership, a majority-interest partner, or a majority-interest group of partners, of the partnership, and

(3)  if the acquirer is a trust, a majority-interest beneficiary, or a majority-interest group of beneficiaries, of the trust, and

iii.  at no time during a series of transactions or events that includes the transfer does the person or group of persons, as the case may be, described in subparagraph i in respect of the particular trust, cease to be a person or group of persons described in any of subparagraphs 1 to 3 of subparagraph ii in respect of the acquirer;

(e)  a transaction the parties to which are obligated to complete under the terms of an agreement in writing between the parties entered into before 21 March 2013, provided that none of the parties to the agreement may be excused from completing the transaction as a result of changes to the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)); or

(f)  the acquisition or disposition of equity of the particular trust at a particular time if

i.  the particular trust is an investment fund immediately before that time, and

ii.  the acquisition or disposition is not part of a series of transactions or events that includes the particular trust ceasing to be an investment fund.

2017, c. 1, s. 72; 2017, c. 29, s. 24.

2017-02-08

21.0.7. For the purposes of paragraph b of section 21.0.6, a person is deemed not to become a majority-interest beneficiary, and a group of persons is deemed not to become a majority-interest group of beneficiaries, of a particular trust solely because of

(a)  the acquisition of equity of the particular trust by

i.  a person from another person with whom the person was affiliated immediately before the acquisition,

ii.  a person who was affiliated with the particular trust immediately before the acquisition,

iii.  a succession from an individual, if the succession arose on and as a consequence of the death of the individual and the succession acquired the equity from the individual as a consequence of the death, or

iv.  a particular person from a succession that arose on and as a consequence of the death of an individual, if the succession acquired the equity from the individual as a consequence of the death and the individual was affiliated with the particular person immediately before the death;

(b)  a variation in the terms of the particular trust, the satisfaction of, or failure to satisfy, a condition under the terms of the particular trust, the exercise by any person of, or the failure by any person to exercise, a power, or, without restricting the generality of this paragraph, the redemption, surrender or termination of equity of the particular trust at a particular time, if each majority-interest beneficiary, and each member of a majority-interest group of beneficiaries, of the particular trust immediately after the particular time was affiliated with the particular trust immediately before

i.  the particular time, or

ii.  in the case of the redemption or surrender of equity of the particular trust that was held, immediately before the particular time, by a succession and that was acquired by the succession from an individual as described in subparagraph iii of paragraph a, the individual’s death;

(c)  the transfer at a particular time of all the equity of the particular trust to a corporation, partnership or another trust (in this paragraph referred to as the “acquirer”), if

i.  the only consideration for the transfer is equity, determined without reference to paragraph d of the definition of “equity” in the first paragraph of section 1129.70, of the acquirer,

ii.  at all times before the particular time the acquirer held no property or held only property having a nominal value, and

iii.  immediately after the particular time the acquirer is neither

(1)  a subsidiary of any person, nor

(2)  a corporation controlled, directly or indirectly in any manner whatever, by a person or group of persons;

(d)  the transfer at a particular time of equity of the particular trust to a corporation, partnership or another trust (in this paragraph referred to as the “acquirer”), if

i.  immediately before the particular time a person was a majority-interest beneficiary, or a group of persons was a majority-interest group of beneficiaries, of the particular trust,

ii.  immediately after the particular time the person, or group of persons, as the case may be, described in subparagraph i in respect of the particular trust, and no other person or group of persons, is

(1)  if the acquirer is a corporation, a person by whom, or a group of persons by which, the corporation is controlled directly or indirectly in any manner whatever,

(2)  if the acquirer is a partnership, a majority-interest partner, or a majority-interest group of partners, of the partnership, and

(3)  if the acquirer is a trust, a majority-interest beneficiary, or a majority-interest group of beneficiaries, of the trust, and

iii.  at no time during a series of transactions or events that includes the transfer does the person or group of persons, as the case may be, described in subparagraph i in respect of the particular trust, cease to be a person or group of persons described in any of subparagraphs 1 to 3 of subparagraph ii in respect of the acquirer; or

(e)  a transaction the parties to which are obligated to complete under the terms of an agreement in writing between the parties entered into before 21 March 2013, provided that none of the parties to the agreement may be excused from completing the transaction as a result of changes to the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)).

2017, c. 1, s. 72.