Two unrelated individuals (X and Z) are the trustees of two trusts for the families of X or of Z, and of asset protection trusts for X or Z. All the voting participating shares of Holdco X are held by Protective Trust X, and those of Holdco Z are held by Protective Trust Z. Family Trust X and Family Trust Z each hold 23% of the voting participating shares of Opco, while Holdco X and Holdco Z each hold 11%. Y (an unrelated individual) holds 32% of the voting participating shares of Opco.
CRA first noted:
… Consolidated Holding … and … Fawcett …held that there is no distinction to be made between a person acting in his or her personal capacity or as a trustee. By analogy, we apply the same principle to the dual roles played by the same trustee acting in that capacity on behalf of two separate trusts. Thus, where a trust established for one purpose controls one corporation and a second trust established for another purpose controls a second corporation, and the same trustees vote the shares of both corporations held by each trust, we are of the view that the two corporations are generally controlled by the same group of persons. …
Applying these principles, CRA concluded:
[B]ecause of their role as trustees of each of the trusts, X and Z would form a group of persons that could control each of the corporations involved. Because of the provisions of subparagraph 251(2)(c)(i), it would follow that Holdco X, Holdco Y and Opco could all be related to each other.