Principal Issues: 1.Whether an individual is a beneficiary of a discretionary trust after having signed documents to surrender its rights as a beneficiary.
2. Whether the deeming provision in subsection 256(1.3) can apply when the deeming rule in subparagraph 256(1.2)(f)(ii) has applied.
3. When there is more than one child under 18 years of age that are beneficiaries of a discretionary trust, whether the parent is deemed to own the aggregate number of the shares deemed to be owned by every child.
Position: 1. None.
2. Yes.
3. No. If subparagraph 256(1.2)(f)(ii) applied to deem children under 18 years of age to own shares of the capital stock of a corporation held by a discretionary trust, the parent would be deemed to own the number of shares held by the discretionary trust.
Reasons: 1. Whether or not an individual is a beneficiary of a discretionary trust (taking into account subsection 248(25) after having signed some documents to surrender his rights is a legal question. In the context of a technical interpretation, we do not provide any legal opinion.
2. Subsection 256(1.3) applies with respect to shares deemed to be owned pursuant to paragraph 256(1.2)(f).
3. Our position is that the application of the provisions of subparagraph 256(1.2)(f)(ii) and subsection 256(1.3) would be considered from the point of view of each of the beneficiaries, on a person by person basis, with the result that the shares of the corporation would not be "double-counted" in any particular situation.
