CRA indicates that a unit trust redemption fee would generally be exempted from GST/HST if it was payable by the redeeming unitholder to the trust rather than the fund manager

The Master Trust Agreements between the manager of various private unit investment trusts and such Funds’ trustee stipulated that redemption charges were payable by the unitholders on redeeming their units. It seemed likely, but unclear, to CRA, based on the limited information provided to it, that such charges were consideration for the service of the Funds in redeeming the units and, therefore, were exempted under para. (d) of the financial services definition as being consideration for the “transfer of ownership” of financial instruments (i.e., it apparently was sufficient that the unitholders ceased to be owners and that it did not matter that there was no new owner of the units).

If, on the other hand, the redemption fees were consideration payable to the Fund manager for its service of “arranging for” the “transfer of ownership” of the units, CRA indicated that this created the possibility that such redemption fees were part of a single supply of taxable management services made by the manager (pursuant to a management agreement between it and the unitholders) for periodic management fees.

Neal Armstrong. Summaries of 3 September 2019 GST/HST Interpretation 173195 under ETA s. 123(1) – financial service – para. (d) and para. (q).