5 October 2012 APFF Roundtable, 2012-0454231C6 F - Garantie pour impôt de départ -- summary under Subsection 220(4.5)

In Scenario A the emigrating individual holds 100 Class A shares of a Canadian-controlled private corporation with a fair market value of $5M, for which the departure tax is $1M. CRA stated (TaxInterpretations translation):

[T]he practice of the CRA is to require all the Class A shares as security even if their value more than covers all of the debt.

Respecting the situation where the individual holds two classes of shares of a CCPC, and he proposes to provide only the Class B shares (with an FMV 10 times that of the departure tax) as security for the departure tax, CRA stated (TaxInterpretations translation):

[T]he practice of the CRA is to require all the shares of the two classes held by Mr. X as security. We consistently prefer and request all the shares of private corporations. If for some reason, the taxpayer can only provide the Class B shares, a valuation must then be made. If there is sufficient equity to cover the debt on a 2:1 ratio, the CRA will accept the shares as security.

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