19 January 2017 External T.I. 2015-0576751E5 F - Trust, Disposition of depreciable property, Assumption -- summary under Subsection 107(2.1)

The correspondent also suggested that s. 13(7)(e) does not apply on a s. 107(2.1) distribution of property: although s. 107(2.1)(a) and (b) respectively deem the trust to have disposed of the property and the beneficiary to have acquired it, s. 107(2.1) does not deem the beneficiary to have acquired the property from the trust. CRA rejected this argument given inter alia that the preamble to s. 107(2.1) stipulates as a precondition to its application that there be a disposition of property by the trust to the beneficiary - and also noted that s. 251(1)(b) provides that a beneficiary and a trust of which he or she is a beneficiary are deemed not to deal with each other at arm's length.