CRA confirms that safe income flows through on a spousal rollover of shares on death

CRA considers that there is no flow-through to the estate and beneficiaries of safe income attributable to shares where they were deemed to have been disposed of on death for their fair market value (thereby crystallizing that safe income in the shares’ stepped-up adjusted cost base) whereas the safe income does flow through where there was a rollover of the shares under s. 70(6).

Neal Armstrong. Summary of 2018 STEP Roundtable, Q.4 under s. 55(2.1)(c).