2022 Ruling 2022-0937661R3 F - 104(4) and pipeline transaction -- summary under Subsection 104(5.8)

A family inter vivos trust for resident beneficiaries (Trust 1) had distributed its common shares of an investment holding company (Holdings) on an s. 107(2) rollover basis to a corporate beneficiary (Holdco) that was held by a newly-formed trust for family members (Trust 2). CRA was then approached, who determined that GAAR applied to the rollout of the Holdings shares to Holdco, so that s. 104(5.8) should be treated as applying to the capital property of Trust 2 upon the (now imminent) occurrence of the 21^st anniversary of the formation of Trust 1 so as to result in a deemed disposition of such property pursuant to s. 104(4)(b)(ii) – and the Directorate so ruled in this ruling letter.