An estate (the “Estate”) which was not resident in Canada was created on the death of a resident individual who held a Canadian condo (representing over 50% of the assets) and cash. The sole executor and beneficiary was the deceased’s daughter, who was a U.S. resident. The capital gain from the deemed disposition of the condo on death qualified for the principal residence exemption. The Estate sold the Property in February 2021, after receiving a s. 116 certificate, and no capital gain resulted (and its net income for 2021 was nil), and since the sale, its assets have consisted solely of cash. The non-resident beneficiary did not dispose of any other taxable Canadian property in the 2021 taxation year and does not have any outstanding liability under the Act with respect to any previous taxation years.
Was the Estate required to file a return of income for its 2021 taxation year?
CRA indicated that, given that the estate was a non-resident individual with no Part I tax payable for 2021, under s. 150(1.1)(b)(iii) whether it was so obligated to file a 2021 return turned on whether the disposition of the condo was an excluded disposition as defined in s. 150(5), which appeared to be the case given inter alia that, as per s. 150(5)(d)(ii), the condo was a property in respect of which the Minister had issued the taxpayer a certificate under s. 116(2), (4) or (5.2).