Principal Issues: 1. Whether the transfer of legal title of a cottage held in a personal trust from an Aunt's name to her nieces and nephew will trigger a disposition and a capital gain.
2. Who must report the capital gain?
3. Can a personal trust use the principle residence exemption?
Position: 1. Depends on whether there is a change in the beneficial ownership.
2. The specified beneficiary of the property.
Reasons: If there is no change in the beneficial ownership, then no disposition has occurred, and no taxable capital gain, in accordance with the definition of disposition under section 248. If there is a change of beneficial ownership then a capital gain may be triggered, but the tax could be sheltered if the property meets the criteria for the principal residence exemption.