5 March 1990 T.I. (August 1990 Access Letter, ¶1383)

Discussion of the consequences of ceasing to qualify as an NRO.

Where an NRO ceases to qualify as such, s. 48(3) will not apply to the shareholder's shares of the NRO if the NRO owns any property that is taxable Canadian property at the time the NRO ceased to qualify by virtue of one of its shareholders becoming a non-resident. [sic]

Where an NRO ceases to be such by virtue of one of its shareholders becoming resident in Canada, the capital gain to the former NRO from the disposition of assets which are not taxable Canadian property will be based on the original cost of those assets to the corporation and not on the value of those assets at the time the shareholder became resident in Canada.