CRA confirms that s. 132.11(4) requires backdating of December 31 income distributions by December 15 year-end MFTs even where their units were acquired in the stub period

Application of the plain wording of ss. 132.11(4) and 132.11(5)(c) can produce an odd result. Where, in the last 16 days of December, a mutual fund trust, which has elected a December 15 year end under s. 132.11(1), acquires some units of another mutual fund trust that also has elected a December 15 year end, an income distribution payable by the acquired trust on December 31 (presumably out of post-December 15 earnings) will be deemed to have been received by the top trust in its year that had already ended on December 15, notwithstanding that it was not a beneficiary of the acquired trust at that time.

Neal Armstrong. Summaries of 17 May 2016 T.I. 2014-0546831E5 under s. 132.11(4) and s. 132.11(3).