The CRA confirmed the position it took in ruling 2009-0350491R3 regarding an alter ego trust that owned two corporations. On the death of the settlor of the trust, it was required to transfer the shares of one corporation to the other. The CRA took the position that this represented an acquisition of control upon the death of an individual as per 88(1)(d.3).
The CRA confirmed, however, that a deemed disposition of property on the death of the settlor of an alter ego trust under 104(4) does not give rise to an acquisition of control because the legal ownership of the shares does not change.
STEP Round Table 2022, question 7, summarized in CCH Tax Topics no 2656 (January 31, 2023)
