Hong Kong Round Table
Right to reacquire property from Trust.
Question
Will subsection 75(2) apply when a contributor of property to a trust, is not a beneficiary, is not otherwise entitled to benefit directly or indirectly from the trust, and does not retain any powers in respect of the trust property, if by the trust deed, or a contract between the contributor and the trustee, the contributor has a right to reacquire the trust property at fair market value at the time of reacquisition.
Department's Position
It is the Department's position that subsection 75(2) would apply in the fact situation mentioned above. The purpose behind subsection 75(2) was to cover situations in which the trusts's property may revert to the person from whom the property was directly or indirectly received, or where there was a certain degree of control of that property resting with the contributor under the trust.
Prepared by D. Patrick June 19, 1992