Regulation 4801

Paragraph 4801(a)

Administrative Policy

11 September 2001 External T.I. 2001-0072575 - Units of Trust - Distribution to Public

addition of 4801(a)

In response to a query as to "whether a mutual fund trust's status under the...ITA...would be adversely affected if the Ontario Securities Commission (the "Commission")...refused to issue a receipt for any prospectus filed with the Commission following the filing of an earlier prospectus which had been accepted by the Commission, CRA stated:

...a distribution of units of a class in accordance with the initial prospectus accepted by the Commission would satisfy the essential requirement of paragraph 4803(2)(a) of the Regulations such that the class of units so distributed would be qualified for distribution to the public. The fact that subsequent events preclude the trust from issuing any further units of that class to new or existing unitholders does not alter the fact that a lawful distribution of units of that class has previously been made in accordance with a properly receipted prospectus.

Please note that it is currently proposed that for trusts created after 1999, paragraph 4801(a) of the Regulations be amended to permit a trust that does not have a class of units which are qualified for distribution to the public to qualify as a mutual fund trust if there has been a lawful distribution in a province to the public of units of the trust and a prospectus, registration statement or similar document was not required under the laws of the province to be filed in respect of the distribution, and the other conditions necessary to qualify as a mutual fund trust are met.

29 March 2012 External T.I. 2011-0403161E5 - Meaning of "shareholder" in 130.1(6)(d)

RRSP is separate unitholder

For the purposes of the 20-shareholder test in s. 130.1(6)(d), an individual and the individual's RRSP and TFSA trusts would each count as a separate shareholder unless s. 104(2) was applied.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 130.1 - Subsection 130.1(6) individual and RRSP counted separately 32

Paragraph 4801(b)

Administrative Policy

12 August 2020 External T.I. 2019-0833841E5 - MIC Shareholder Count - Joint holders

joint tenants potentially treated as single security holder

S. 130.1(6)(d) requires inter alia that a mortgage investment corporation have at least 20 shareholders. How is this test applied where a husband and wife hold a share as joint tenants (with rights of survivorship)?

After noting that under a joint tenancy, “the joint tenants have concurrent ownership and possession of the same property,” CRA stated:

[W]here two or more joint owners of a share of a corporation are considered one shareholder under relevant corporate law or are entitled to jointly receive any dividend paid on the share by the corporation, the joint owners of the share will generally be counted as one shareholder for purposes of paragraph 130.1(6)(d) … .

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 130.1 - Subsection 130.1(6) - Paragraph 130.1(6)(d) joint tenants holding a share may be one shareholder, not two 199

8 June 2020 External T.I. 2019-0822901E5 - Mutual Fund Trusts

an individual and their registered plans can constitute multiple beneficiaries under the 150 MFT beneficiary test

An individual has a non-registered account and is a holder of a TFSA and an annuitant of a RRSP. The individual is also a contributor to a spousal or common-law partner RRSP. The non-registered account and each of the registered plan trusts hold units of the same class of the mutual fund trust (“MFT”) that satisfy the requirement of being a block of units having a fair market value of at least $500.

CRA stated:

[T]here are four beneficiaries for purposes of satisfying the 150 beneficiary requirement. The individual and each registered plan trust count as a separate beneficiary.

Notwithstanding our general view described above, we note that the CRA has previously applied … GAAR … in situations where mutual fund trust status was artificially achieved to facilitate abusive tax avoidance.

The CRA summary noted:

There is no requirement to look through the registered plan trust.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 132 - Subsection 132(6) - Paragraph 132(6)(c) individual's RRSP or TFSA counts as a separate beneficiary for 150-beneficiaries test purposes 56