When asked to comment on the statement in IT-305R4, para. 8:
Once a trust qualifies as a spouse trust under the terms of subsection 70(6), it remains a spouse trust and is subject to the provisions affecting such trusts (for example, paragraph 104(4)(a)) even if its terms are varied by agreement, legal action or breach of trust. However, these events may cause other provisions of the Act to apply, such as paragraph 104(6)(b) and subsections 106(2) and 107(4).
CRA stated:
The wording of subparagraph 104(4)(a)(i) clearly provides for a deemed disposition date that is based on the terms of the trust “at the time it was created”; accordingly, even if the terms of the trust are varied by agreement, legal action, or breach - it is the terms of the trust upon creation that would determine the application of subsection 104(4). In the case of a post-1971 spousal or common-law partner trust, as defined in subsection 248(1), these would be the terms described in subparagraph 104(4)(a)(iii).
The main purpose of paragraph 8 in IT-305R4…is to clarify that in applying paragraph 104(4)(a), one must look to the terms of the trust at time of creation, such that any subsequent change in the terms of the trust would not invalidate the application of paragraph 104(4)(a).