The Federal Court of Appeal has allowed the Crown’s appeal and dismissed the cross-appeal of one of the taxpayers in Vefghi Holding Corp. v R, 2023 TCC 135, which I discussed here. See R v Vefghi Holding Corporation, 2025 FCA 143. The Court answered the Rule 58 question as follows:
Where the conditions of subsection 104(19) of the Act are satisfied and a trust designates the Amount pursuant to s. 104(19), such that the Amount is deemed to have been a dividend received by the Beneficiary, the determination of whether the Issuer is connected with the Beneficiary for purposes of s. 186(1)(a) is made at the end of the particular taxation year of the trust in which the trust received the dividend from the Issuer.
