The residue of Father’s estate was divided equally among his children including Son, with each child being entitled to the income from that child’s share, with the power of the trustees to distribute all of a portion of a child’s share to the child on or after attaining 25 (but with no such encroachment having occurred), and with the child’s remaining share to be held in trust for that child’s issue in equal shares per stirpes on the child’s death.
Whether Son was a “majority-interest beneficiary” impacted whether s. 69(11) applied to a “lossco transaction”. In finding that this was unlikely as a valuation matter, the Directorate stated:
As the trustees have no discretionary power over the division of Father’s Estate, subparagraph 251.1(4)(d)(i) would not apply to deem any Child to have an interest in an amount greater than XXXXXXXXXX% of the capital of Father’s Estate at the Time. …
Son also held contingent beneficial interests in the remaining XXXXXXXXXX% of Father’s Estate, which would only be realized if the other Children die without issue surviving. At the Time, XXXXXXXXXX Children were alive and XXXXXXXXXX of Son’s siblings had issue surviving.
…[I]t is unlikely that the FMV of Son’s contingent beneficial interests at the Time could result in him being considered a “majority-interest beneficiary” of Father’s Estate. … Accordingly, it is unlikely that the FMV of the total of Son’s respective income or capital interests in Father’s Estate could reasonably be considered to be greater than 50% of the FMV of all of the income or capital interests in Father’s Estate at the Time.