The taxpayer (a Canadian-resident individual) transferred shares of a Canadian company to an Austrian private foundation (privatstiftung) which had been contemporaneously formed and funded in Austria by his father. The taxpayer, as an "ultimate beneficiary" under the foundation deed, was entitled to the property in the event that his father revoked the foundation. After noting (at para. 109) that "no technical meaning need to be ascribed to 'revert' in the context of property distributed to a beneficiary that was previously owned by the beneficiary," C. Miller J found that the shares acquired by the foundation thus could revert to the taxpayer.
CRA assessed the taxpayer on the basis that s. 75(2) applied to attribute a taxable capital gain to the taxpayer when the foundation sold most of its shares to a third party at a gain.
After finding that the foundation was the trustee of a trust, Miller J. found that because s. 75(2) only referred to property that was held by a trust on its creation (or property substituted for such property), the "person" referred to in that subsection is either a settlor or someone who contributes property to a trust as if the person were a settlor. The taxpayer was neither of these - rather, he was a beneficiary selling property to the trust at fair market value. Accordingly, the taxpayer was not subject to attribution under s. 75(2).