S. 132(5.3) may not apply to unit redemptions occurring by virtue of the winding–up of a mutual fund trust

S. 132(5.3) generally prohibits pushing out a capital gain realized by a mutual fund trust on a redemption of its units by a unitholder to the extent that such gain exceeds the accrued gain of the unitholder on the redeemed units.

It is suggested that, given that s. 132(5.3) refers to a “redemption by [a] beneficiary” rather than to a redemption “by the trust,” it would not appear to apply to the type of redemption occurring on a winding-up of an MFT.

Neal Armstrong. Summaries of Etienne C. Laplante, “Two Methods of Winding Up Mutual Fund Trusts,” Canadian Tax Focus, Vol. 15, No, 1, February 2025, p. 6 under s. 132(4) – CGR, and s. 132(5.3).