CRA states that the ETA s. 167 election “could be available” on an ITA s. 98(5) wind-up

CRA has indicated that an ETA s. 167 election is not available where a partnership is wound up under ITA s. 98(3), as each partner receives an undivided interest in the partnership property, so that there is not a supply of the business to one recipient. When asked about a s. 98(5) wind-up, CRA gave a very guarded response (perhaps reflecting diffidence about opining on income tax rollovers), stating:

Where the disposition of 100% of the partnership property from the partnership to the former member constitutes the supply of a business, and where an agreement for a supply of the business from the partnership, as supplier, to the former member exists, an election under subsection 167(1)… could be available, provided the conditions for the election are met.

Neal Armstrong. Summary of 26 February 2015 CBA Roundtable, Q. 19 under ETA s. 167(1).