Where a Canadian resident individual inherits the shares of a publicly-traded company from a foreign relative, those shares will have a nil cost amount to him under s. 107(2)(b). Although under ss.70(5)(a) and (b) a deceased taxpayer is deemed to have disposed of capital property at fair market value and the person acquiring such property as a consequence of the taxpayer's death is deemed to have acquired them for the same amount, "in our view, a non-resident individual that is not subject to taxation in Canada, pursuant to subsection 2(3) of the Act, is not subject to the deemed disposition rules in paragraph 70(5)(a). Consequently, we would not expect the provisions of paragraph 70(5)(b) to apply to an estate that acquired property as a consequence of a non-resident person's death ... ."
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