Case Notes For July, 2019

Kau v. The Queen, 2018 TCC 156, by Aasim Hirji

Section 116 of the Act provides rules that protect the Canadian government's ability to collect tax on capital gains on a disposition of "taxable Canadian property". "Taxable Canadian property" includes real property situated in Canada, Canadian resource-related property and the shares of corporations where the value is principally derived from Canadian real property or resource property.¹ When a non-resident of Canada disposes of, for example, a residential property, a notification requirement is triggered, whereby the disposition has to be reported to the Canada Revenue Agency ("CRA") either before the disposition or within ten days after the disposition. If no notification is made to the CRA and a compliance certificate has not been issued, the purchaser is required to withhold 25% of the purchase price and must withhold on that amount at closing and remit that amount to the CRA within 30 days. In order to obtain a