CRA will issue s. 116 certificates based on the draft s. 87(8.5) foreign merger rollover
Draft ss. 87(8.4) and (8.5) in approximate terms provide that on a same-country related-party foreign merger that meets specified conditions, the foreign merging corporations can file a joint election to have shares that are (non-treaty protected) taxable Canadian property be deemed to have been disposed of on a rollover basis on the merger.
CRA will grant s. 116 certificates based on treating this draft legislation as already being in effect, provided that some back-up for the adjusted cost base of the disposed-of shares is provided to it. No share valuation is required. CRA did not mention any concern about one of the foreign corporations no longer being around to make the election.
This CRA response presumably also applies to the same and similar draft s. 87(8.4) and (8.5) rules respecting trust units and partnership interests, respectively.
Neal Armstrong. Summary of 21 November 2017 CTF Annual Conference Roundtable, Q.14 under s. 87(8.5) and s. 116(1).