It may be desirable to deliberately taint a non-resident estate (through a small bequest to a distant Canadian relative) as a s. 94(3) trust so as to access s. 164(6)

CRA has considered (e.g., in 2010-0384531E5) that a non-resident estate of a deceased resident may only use s. 164(6) to reduce or offset the deceased’s gain under s. 70(5), by carrying back a capital loss realized by it on shares, where such shares are taxable Canadian property (TCP).

This issue might be addressed by drafting the will such that the non-resident estate will have a “resident contributor,” so that the estate will be deemed by s. 94(3) to be resident, thereby permitting (per 2012-0437211I7) the estate to elect under s. 164(6) even if the shares are not TCP.

Given that the deceased likely would qualify as a “resident contributor” and that the definition of “beneficiary” in s. 94(1) includes those who are “beneficially interested” in the estate (as expansively defined in s. 248(25)), a minor or contingent bequest to a distant resident beneficiary should result in there being a “resident beneficiary” so as to engage deemed residency for the estate.

Neal Armstrong. Summary of H. Michael Dolson, Balaji (Bal) Katlai, and Leanne Rodrigo, “Will Planning, Subsection 164(6), and Non-Resident Trusts,” International Tax Highlights, Vol. 2, No. 3, August 2023, p. 15 under s. 164(6).