CRA seems to indicate that joint tenants holding a share are one shareholder, not two
S. 130.1(6)(d) requires inter alia that a mortgage investment corporation have at least 20 shareholders. How is this test applied where a husband and wife hold a share as joint tenants (with rights of survivorship)?
After noting that under a joint tenancy, “the joint tenants have concurrent ownership and possession of the same property,” CRA stated:
[W]here two or more joint owners of a share of a corporation are considered one shareholder under relevant corporate law or are entitled to jointly receive any dividend paid on the share by the corporation, the joint owners of the share will generally be counted as one shareholder for purposes of paragraph 130.1(6)(d) … .
The first test might seem silly – obviously, they are two persons, not one. However, given the quoted acknowledgement above of the concurrent nature of ownership in joint tenancy, the second test seems to be saying that they would be regarded as one shareholder.
This approach might be relevant elsewhere, e.g., in determining whether a mooted mutual fund trust has 150 beneficiaries under Reg. 4801(b).
Neal Armstrong. Summary of 12 August 2020 External T.I. 2019-0833841E5 under s. 130.1(6)(d).