Taxable Canadian property of a non-resident was expropriated by a municipality and the non-resident was paid compensation. However, the non-resident has commenced court proceedings to seek further compensation. After noting that s. 44(2) deemed there to be no disposition until the compensation was determined by the court, CRA indicated that s. 116(3) would not apply so long as such suit remained outstanding, and then stated:
Notwithstanding the fact that subsection 116(3) of the Act may not apply to the non-resident at the time of the expropriation, by virtue of the application of subsection 44(2) of the Act, subsection 116(5) of the Act will nevertheless apply to any government body at that time to require withholding from any compensation that is paid to the non-resident for expropriated property.