11 July 2007 External T.I. 2006-0192101E5 F - Disposition d'actions par un non-résident -- summary under Subsection 212.1(1)

A non-resident individual who had acquired shares of a Canadian real estate company with a low paid-up capital and a high adjusted cost base (stepped up on the death of that individual’s spouse) was deemed to receive a dividend equaling the excess over the shares’ PUC when they were disposed of to another wholly-owned Canadian corporation for a note. CRA noted that none of the relevant proposals in the 1998 federal budget had been implemented.