On his emigration from Canada, Mr. A held an interest in a real estate partnership which was capital property, and realized a taxable capital gain pursuant to s. 128.1(4)(b). However, instead of paying the resulting "Departure Tax," he made an election under s. 220(4.5). He then transferred the partnership interest on a s. 85(1) rollover basis to a corporation (Aco) of which he was the sole shareholder. CRA stated:
Mr. A having disposed of his Interest to Aco, we are of the view that Mr. A would be obliged to pay his Departure Tax.