CRA indicates that a change of 1 out of 3 trustees generally triggers an acquisition of control unless the replacement trustee is related

A Canadian corporation is wholly owned by a trust, which is a discretionary trust, so that s. 256(7)(i) does not apply to changes in its trustees. CRA indicated that although the determination of which trustee or group of trustees controls a corporation held by the trust is a question of fact, it considers there to be a rebuttable presumption that all of the trustees constitute a group that controls the corporation - so that there would be an acquisition of control, for example, if the trust deed required trustee decisions to be made by a majority of the three trustees, and one of their number was replaced by an unrelated trustee.

However, where the replacement trustee is a related person, s. 256(7)(a)(i)(A) may apply to deem there to be no acquisition of control. An example would be where there is a trust with two trustees, who are required by the trust deed to make their decisions unanimously, and one of them resigns and is concurrently replaced by an individual related to him or her.

Neal Armstrong. Summaries of 15 June 2022 STEP Roundtable, Q.6 under s. 251.2(2)(a) and s. 256(7)(a)(i)(A).