2024-1003461C6 STEP 2024 - Q4 - Acquisition of Control

Principal Issues: Has the CRA modified its administrative position on whether the replacement of an executor, trustee or administrator of an estate as a consequence of death or inability to act may result in an acquisition of control?

Position: No.

Reasons: See below.

Author: McPherson, Ryan
Section: -

2024 STEP CRA Roundtable – June 4, 2024

QUESTION 4. Acquisition of Control of a Corporation

In archived document IT-302R3, the CRA adopted the administrative position that a change of executor, administrator or trustee of an estate does not result in an acquisition of control of a corporation controlled by the estate, if the replacement results from a death or inability to fulfill the function of an executor, administrator or trustee.

1) Can the CRA comment on whether this continues to be their position?

2) Would the position apply to a replacement trustee that is an independent trust company?

CRA Response:

1) It remains our administrative position that where the executor, administrator, or trustee of an estate is replaced as a result of that person's death or inability to fulfill their functions, control of the corporation would not, solely as a result such replacement, be acquired.

2) With respect to the replacement of a person as a consequence of their death or inability to fulfill the function of an executor, administrator or trustee of an estate, our administrative position is not conditional on the replacement trustee being related to or otherwise connected to the executor, administrator or trustee being replaced.

Ryan McPherson
2024-100346

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