The CRA usually requires that an estate wait for at least a year to receive repayments from the note issued by Newco as part of a pipeline, and the repayments that begin at that time must be spread out over a number of months. The CRA recently stated, however, that an estate can cause the note to be repaid immediately after its issue to the extent necessary to permit the estate to pay income taxes. See ruling 2018-0789911R3.
The author notes that the fact situation in the ruling was somewhat more complicated than usual and that the main business of the subject entities (whose shares the deceased held immediately before death) continued undisturbed by the distribution.
Éric Hamelin “Post Mortem Pipeline: The CRA Relaxes Its Position” 20:3 Tax for the Owner-Manager (July 2020)