A non-resident inter vivos trust distributes its shares of a private Canadian real estate corporation (Canco) in satisfaction of the capital interest of its sole non-resident beneficiary. CRA stated:
[A] non-resident trust may be subject to the deemed disposition rule in paragraph 104(4)(b). This provision provides for a deemed disposition of specified property on the day that is 21 years after the creation of every trust. This provision could give rise to tax consequences if it applies to a non-resident trust, for example if the non-resident trust is deemed as a consequence of the application of paragraph 104(4)(b), to have disposed of taxable Canadian property.