CRA confirms that the application of s. 75(2) to only one property in a trust can taint all the other trust property under s. 107(4.1)

CRA confirmed that a personal trust was tainted under s. 107(4.1) when it was settled with a gold coin by one of the capital beneficiaries – so that until the settlor died, none of the other property in the trust could be rolled out under s. 107(2) to the other capital beneficiaries even though such property had been acquired in an arm’s length purchase from an arm’s length vendor. Whether the vendor of such property was still in existence or not was irrelevant.

Neal Armstrong. Summary of 12 May 2016 External T.I. 2014-0552341E5 under s. 107(4.1).