In confirming that the exchange of units of a particular segregated fund with a redemption fee for units of a segregated fund without a redemption fee, CRA stated:
Paragraph 138.1(1)(a) deems an inter vivos trust, referred to as a "related segregated fund trust," to be created, and paragraph 138.1(1)(e) deems a segregated fund policyholder to have an interest in the related segregated fund trust. By virtue of subparagraph 39(1)(a)(iii), the gain on the disposition of that interest may be treated as a capital gain. In our view, the exchange of units of a particular segregated fund that have a redemption fee for other units of a segregated fund that do not have a redemption fee is a transaction that constitutes a disposition under paragraph (a) of the definition of "disposition" in subsection 248(1).