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8 October 2010 Roundtable, 2010-0373611C6 F - Certificat avant distribution -- summary under Subsection 159(2)

A trust, whose sole trustee is a corporation, acquired, as its only asset, a property valued at $50 million (the "Property") in consideration for the issuance of a note payable in the same amount, and then disposed of the Property and used the proceeds to repay the note. Should the trust obtain an advance certificate for distribution under s. 159(2) before the note is repaid and, if so, and in the event that the trustee has failed to obtain such a certificate?

By services, 28 November, 2015

Chan v. The Queen, 2001 DTC 5570, 2001 FCA 302 -- summary under Subsection 107(2)

A taxpayer, who was the beneficiary of a trust established by his father and mother who were the trustees, received approximately $1.8 million in settlement of an action brought against them in respect of their handling of assets of the trust. In affirming a finding of the Tax Court that the monies received were proceeds of disposition of his capital interest in the trust rather than being property distributed to him by the trust in satisfaction of his capital interest in the trust as contemplated by s. 107(2), Sexton J.A.

By services, 28 November, 2015

McKenzie v. The Queen, 2011 DTC 1216 [at at 1274], 2011 TCC 289 -- summary under Subsection 106(3)

The testator of a testamentary trust holding shares of a company provided that an executive employee of the company had an entitlement to the income from one-fifth of those shares until the termination of her employment. When the executive (the taxpayer) was subsequently dismissed, the taxpayer sued the capital beneficiary and the trust for wrongful dismissal, oppression and wrongful depletion and termination of her income interest. A settlement agreement provided for the payment by the trust to her of $1.7 million in satisfaction of her interest in the trust.

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