A trust holding shares for a future generation runs on its own clock, one that does not wait for a buyer or the family's own timeline.
Short answer
Every trust is deemed to dispose of its capital property, including any operating-company shares it holds, on a fixed 21-year cycle: subsection 104(4) provides that “every trust is, at the end of each of the following days, deemed to have disposed of each property of the trust” — a rule with no exception for a trust that simply has no buyer and no cash on the relevant date.
The 21-year rule fires on the calendar, independent of any sale, distribution, or family decision. The usual way to avoid the deemed gain crystallizing inside the trust is a rollout to a capital beneficiary under section 107(2) before the anniversary arrives, transferring the shares out at cost rather than triggering a deemed disposition inside the trust.
The ordinary rollout is not always available. Subsection 75(2) attributes trust income and gains back to the settlor wherever the trust holds property on condition that it may “revert to the person from whom the property or property for which it was substituted was directly or indirectly received”, and subsection 107(4.1) denies the ordinary rollout wherever section 75(2) has applied and the beneficiary receiving the distribution is not the settlor — a familiar-looking discretion clause can quietly retain that reversionary power and block the family’s own planned fix.
One file shows a trust created to hold shares for a future generation running into a fixed calendar date with no buyer and no cash. A second shows a settlor who never gave up control, and a rollout that the family’s own usual section 104(4) fix could not reach because subsection 75(2) had applied all along.
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