Income Trusts and Non-Resident Ownership Subsection 132(7) provides that, save certain exceptions, a trust established or maintained primarily for the benefit of non-resident persons loses its mutual fund trust status. There have been a number of media reports on the increasing number of non-resident investors in certain income trusts. Question 1 Assuming the exception in […]
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Income Trust Reorganizations As previously stated, the typical structure for so-called income trusts is to have the trust hold all the shares and notes of a corporation. Over the last year, some mutual fund groups have announced that their group was contemplating transferring the business from the wholly owned corporation to a limited partnership in
Income Trusts and Subparagraph 132(6)(b)(i) – “its only undertaking was the investing of funds.” Subparagraph 132(6)(b)(i) requires that the trust’s only undertaking be the investing of its funds in property (other than real property). However, that phrase (“only undertaking was the investing of funds”) is not defined in the Act, and the tax community has