CRA finds that where an alter ego trust for an individual hold his residence, occupation by his spouse of the residence is not a use of the trust capital

An individual transfers his personal residence to a trust, which is drafted so as to be an alter ego trust described in s. 73(1.01)(c)(ii), i.e., he is the sole income and capital beneficiary for his life. CRA indicated that the requirements of s. 73(1.01)(c)(ii) (presumably with a focus on the requirement that during his lifetime and "under" the trust, “no person except the individual may … obtain the use of any of the … capital of the trust”) will not be breached if the individual’s spouse occupies the residence along with him.

Neal Armstrong. Summary of 21 April 2016 External T.I. 2015-0607451E5 F under s. 73(1.01)(c)(ii).