Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p38
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 38/41)
Character Range: 4334246–4336908

(i) an entity covered by subsection 275‑20(4) has a *MIT participation interest (the first interest) in the trust; and
 (ii) another entity covered by subsection 275‑20(4) also has a MIT participation interest (the second interest) in the trust;
  disregard the second interest to the extent that it arises through the existence of the first interest; and
 (b) if an entity that is not a trust has a MIT participation interest in the trust because it holds interests in the trust indirectly, through a *chain of trusts—do not treat a trust in the chain of trusts as having a MIT participation interest in the trust.
 (3) For the purposes of paragraph (2)(b), treat an entity covered by subsection 275‑20(4) as an entity that is not a trust.
 (4) For the purposes of paragraphs (1)(a) and (b), apply the rules in subsection 275‑20(7).

275‑30  Closely‑held restrictions
 (1) The trust satisfies the requirements in this subsection in relation to the income year unless, at any time in the income year, any of the following situations exist:
 (a) for a trust mentioned in subparagraph 275‑10(3)(d)(i) (trusts with wholesale membership)—10 or fewer persons have a total *MIT participation interest in the trust of 75% or more;
 (b) if paragraph (a) does not apply—20 or fewer persons have a total MIT participation interest in the trust of 75% or more;
 (c) a foreign resident individual has a MIT participation interest in the trust of 10% or more.
 (2) For the purposes of paragraphs (1)(a) and (b):
 (a) if an entity covered by subsection 275‑20(4) has a *MIT participation interest in the trust—treat that entity as not having a MIT participation interest in the trust; and
 (b) if an entity that is not a trust has a MIT participation interest in the trust because it holds interests in the trust indirectly, through a *chain of trusts:
 (i) if the entity is covered by subsection 275‑20(4)—do not treat it as having a MIT participation interest in the trust; and
 (ii) do not treat a trust in the chain of trusts as having a MIT participation interest in the trust.
 (3) For the purposes of paragraph (2)(b), treat an entity covered by subsection 275‑20(4) as an entity that is not a trust.
 (4) For the purposes of paragraphs (1)(a) and (b), apply the rules in subsection 275‑20(7).

275‑35  Licensing requirements for unregistered MIS
 (1) The trust satisfies the requirements in this section in relation to the income year if, at the time the payment mentioned in paragraph 275‑10(3)(a) is made (the time of the first fund payment for the income year):
 (a) the trust is operated or managed by:
 (i) a financial services licensee (within the meaning of the