The questioner referenced the CRA statement at the 2009 British Columbia Tax Conference that, in the context of an estate freeze of a Canadian-controlled private corporation, where the freezor, as part of the estate freeze, keeps controlling non-participating preference shares in order to protect his economic interest in the corporation, CRA generally accepts that no premium should be attributed to such shares in determining their fair market value under s. 70(5), and asked whether this position also applies for the purposes of s. 104(4)(a), e.g., re the deemed disposition arising on the death of the spouse who is the beneficiary of a spousal trust. CRA stated:
...as was noted, CRA generally will ignore any premium that could be attributed to controlling non-participating preference shares, for purposes of subsection 70(5)...where the shares were held to protect the deceased's economic interest in the corporation....[W]e have not had the opportunity to give full consideration to whether the above position should apply for purposes of [s. 104(4)(a).]