Words and Phrases - "class of units"

a
82
b
44
c
75
d
50
e
37
f
31
g
17
h
13
i
71
j
2
k
2
l
30
m
51
n
25
o
38
p
79
q
2
r
74
s
85
t
44
u
14
v
8
w
20
y
2
“
1

12 February 2003 External T.I. 2002-0167545 - MFT - Units Issued in Series

Summary Under
Tax Topics - Income Tax Regulations - Regulation 4801 - Paragraph 4801(b)
if 2 or more series, 150-unitholder test applied by requiring the block size to be based on the unit value of the lower-value series’ units

Units of a unit trust consist of one class issued in two series, with those of the first series having a fair market value (FMV) of less than $25 per unit and the second having an FMV between $25 and $100 per unit. Given that s. 248(6) did not apply, and regarding the requirement in Reg. 4801(a)(i) that there be at least 150 unitholders each of whom holds at least a block of units of a class that meets the test in Reg. 4801(a), CRA stated:

[I]f both series were issued but there were not 150 unitholders each holding at least 25 units of the second class, it is our view that, for purposes of determining block size, it would be appropriate to consider the least valuable unit in the class. Thus … the block size would be 100 and thus if there were 100 unitholders of the first series each holding at least 100 units, and there would have to be at least 50 unitholders of the second series, each holding at least 100 units.

Words and Phrases
class of units
Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 4803 - Subsection 4803(1) - Block of Units block size for multiple series based on FMV of least valuable unit 102
Tax Topics - Income Tax Regulations - Regulation 4801 - Paragraph 4801(a) - Subparagraph 4801(a)(i) distribution requirement can be satisfied by only one of the series within a class 104