Mr. X was deemed by s. 128.1(4)(b) to have disposed of shares of Canco, which were taxable Canadian property, when he ceased to be resident in Canada in 2009, and then received dividends in 2010 and 2011 which were subject to Part XIII withholding. CRA noted:
If, on the actual disposition of the property, subsection 40(3.7) applies, an amount computed by reference to the Part XIII tax paid on any dividends to the taxpayer subsequent to their departure from Canada may be credited against the taxes otherwise payable in respect of the deemed gain realized under subsection 128.1(4), subject to the calculation found in section 119.