On the sale of a property at fair market value to a bona fide third party outside the ordinary course of the vendor's business, does the deemed trust under ss. 227(4) and (4.1) only to the proceeds of disposition and not to the sold property? CRA stated:
The rights granted to Her Majesty pursuant to subsections 227(4) and 227(4.1) establish a form of "floating charge" whose purpose is to preserve the State's claim. In broad terms, a deemed trust established under those provisions ceases to apply to property of a tax debtor when the tax debtor disposes of the property in the normal course of business for FMV consideration to an arm's length bona fide purchaser. That position is supported … in First Vancouver Finance.