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ARTICLE · 02 JULY 2026

Canada Revenue Agency Rules On Novel Mutual Fund Trust Reorganization

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On June 30, 2026, the Canada Revenue Agency (CRA) published a favourable advance income tax ruling1 on a novel trust reorganization that may provide greater flexibility to reorganize mutual fund trusts to implement...

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Stan Fedun
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John Tobin
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Benjamin Mann
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On June 30, 2026, the Canada Revenue Agency (CRA) published a favourable advance income tax ruling1 on a novel trust reorganization that may provide greater flexibility to reorganize mutual fund trusts to implement “fund-on-fund” structures.

The fund family that was the subject of the ruling had five original mutual fund trusts with different investment mandates (the Original Funds). The manager of the Original Funds (the Manager) wanted to establish an aggregator top fund (the Aggregator Fund) that would invest in each of the Original Funds and permit certain unitholders of those funds to transition to the Aggregator Fund on a tax-deferred or “rollover” basis. The purpose of the reorganization was to simplify the administration associated with the rebalancing of investments in the Original Funds for the participating unitholders to their target investment allocations.

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