When are persons related for the purposes of subparagraph 110.6(14)(c)(ii)? A person is not generally deemed to be related to himself except for certain purposes (paragraph 251(5)(c), subparagraph 55(5)(e)(ii), subsection 256(1.5) and determining whether corporations are associated). Compare this to the affiliated persons rules where persons are affiliated with themselves for all purposes.
This result seems perverse. If Ms Y sells share to a family trust of which her husband and children are beneficiaries, then she will be considered related to the trust under 110.6(14)(c)(ii). She will not be related to the trust under that subparagraph, if she is also a beneficiary. She is not related to herself, and the subparagraph applies only if she is related to all beneficiaries of the trust.
Carolin and Kakkar “Are Persons Related to Themselves? CGE Planning and the 24-Month Holding Period Rule” 21:4 Tax for the Owner-Manager (October 2021)
