CRA confirms that flunking the 150 unitholder test does not result in immediate (or necessarily permanent) loss of a MFT’s RCGTOH account

CRA has confirmed that where a mutual fund trust ceases to satisfy in a year the requirement for at least 150 unitholders, if will still be a good MFT for that year for purposes of the refundable capital gains tax on hand (RCGTOH) rules – and that its remaining RCGTOH balance will thereafter be frozen for reactivation in any subsequent year throughout which it satisfies the 150 unitholder test and the other MFT requirements.

Neal Armstrong.  Summary of 7 August 2013 Memorandum 2013-0497961I7 under s. 132(4) - Refundable Capital Gains Tax On Hand.