CRA indicates that the s. 116 certificate limit and the purchase price can coincide even where the vendor partnership has resident partners

CRA’s practice of accepting a consolidated s. 116 certificate request from a partnership disposing of taxable Canadian property (rather than requiring each partner to submit the request) created in its mind a technical issue where that partnership has both Canadian and non-resident partners, namely, that the certificate limit could only be based on the interests in the partnership property (that was TCP) disposed of by the non-resident partners, whereas the potential liability of the purchaser under s. 116(5) could be based on the excess of the global purchase price (reflecting also the interests in the partnership TCP property being sold by the resident partners) over the certificate limit.

However, CRA indicated that it considered that s. 116 can be interpreted such that, in determining the amount of the s. 116(5) liability, the purchase price is only the portion that is attributable to the interest sold by the non-residents, such that the certificate limit and the purchase price would line up, and there would be no resulting s. 116(5) liability.

Neal Armstrong. Summary of 27 October 2020 CTF Roundtable, Q.4 under s. 116(5).