Fraser v. The Queen, 91 DTC 5123 (FCTD), aff'd 95 DTC 5684 (FCA)

Approximately 100 taxpayers invested in a pool of mortgages by paying a subscription price for "units" to two companies, that used the proceeds to acquire mortgages and distributed the income and proceeds thereon from time to time to the unit holders. This was found to be a trust rather than an agency arrangement in light inter alia of the lack of any real control by the investors over the actions of the two trustee companies.

Subsection 75(2) did not apply to income earned by unit holders in a trust which used the subscription proceeds for the units to acquire mortgages because "subsection 75(2) relates to property income only, not income from a business" (p. 5129) and because "subsection 75(2) only applies when the beneficiary has a reversionary right and ... no such right exists in this case" (p. 5129).