Canadian Ownership and Control Determination Regulations, 1984 — 48
48 Subject to section 49, in determining the classes of formal equity and the beneficial Canadian ownership of a class of formal equity of a trust, other than a unit trust, the following rules apply: (a) each of the following shall be a class of formal equity of the trust, consisting of 100 units: (i) all interests in possession of beneficiaries whose interests can be expressed in terms of a right to a certain amount or percentage of all or any part of the income of the trust, (ii) all interests in expectancy of beneficiaries whose interests can be expressed in terms of a right to a certain amount or percentage of all or any part of the income of the trust, (iii) all interests in possession of beneficiaries whose interests can be expressed in terms of a right to a certain amount or percentage of all or any part of the capital of the trust, (iv) all interests in expectancy of beneficiaries whose interests can be expressed in terms of a right to a certain amount or percentage of all or any part of the capital of the trust, (v) all discretionary interests of beneficiaries with respect to all or any part of the income of the trust, and (vi) all discretionary interests of beneficiaries with respect to all or any part of the capital of the trust; (a.1) where a trust demonstrates to the Minister that the beneficial Canadian ownership of a class of formal equity of the trust does not accurately represent the beneficiaries’ interests in the capital or income of the trust, or any part thereof, the Minister may adjust the beneficial Canadian ownership accordingly; (b) subject to paragraph (c), each beneficiary of the trust shall be deemed to own a number of units of a particular class referred to in paragraph (a) determined in accordance with the formula (Av/Tv) × 100, calculated to two decimal places where (i) Av is the value of the interest of the beneficiary represented in that class, and (ii) Tv is the value of all beneficial interests constituting that class; c) subject to paragraph (d), the beneficial Canadian ownership of a class of formal equity that comprises discretionary interests in a trust shall be equal to the lowest Canadian ownership rate of any of the beneficiaries whose discretionary interests constitute that class determined as if the words “rounded to the nearest whole number” in section 16 read “rounded to the nearest 10th of a percentage point” and, for greater certainty, subject to paragraph (f), if such beneficiaries include a person that has or may have a Canadian ownership rate of nil, whether or not the identity of that person can be ascertained, the beneficial Canadian ownership of the class shall be deemed to be nil; d) the Canadian ownership rate of a trust shall be determined without regard to the existence of any discretionary power to consume, advance, appropriate, encroach upon or otherwise dispose of all or part of the capital or income of a trust to or for the benefit of any one or more individuals who have interests in that capital or income independently of the existence of the discretionary power, if the exercise of that power is limited by a determinable standard relating to the health, education, maintenance, support or comfort of such individual or individuals; e) any possibility that one or more persons will subsequently acquire interests in property of the trust at birth, on adoption or on marriage shall be disregarded; f) for the purposes of paragraph (b), the value of any income right, annuity, term of years, life interest or other similar estate and of any interest in expectancy shall be determined, (i) where the income right, annuity, term of years, or other similar estate or the interest in expectancy does not depend on a life contingency, on the basis of compound interest at the designated rate of interest with annual rests, and (ii) where the income right, annuity, term of years, life interest or other similar estate or the interest in expectancy depends on a life contingency, on the bas