CRA indicates that an emigration-year return generally cannot be opened up more than 6 years later to allow a FTC for foreign tax imposed on a subsequent sale

Where a Korean immigrated to Canada while holding appreciated Korean real property and then emigrated from Canada 10 years later after it had further appreciated, thereby realizing a capital gain from its deemed disposition under s. 128.1(4)(b), he would be potentially eligible under s. 126(2.21) to claim a Canadian foreign tax credit for Korean taxes that become become payable on a subsequent sale respecting the gain that accrued in Canada, provided that this credit is assessed within the extended reassessment period of six years following the emigration year. However, the Korean property might be sold more than six years later. Can this period be extended by filing a waiver with CRA?

CRA, in clarifying its comments in 2016-0660421E5, indicated that it generally would not accept a waiver beyond this six-year period, but that, as a limited exception to this proposition:

[I]f any of the circumstances to support the deduction under subsection 126(2.21) of the Act (e.g., disposition of the property and/or foreign taxes paid) are present within the statutory assessment period referred to in paragraph 152(4)(b) of the Act, it may be appropriate for the Minister to consider a taxpayer’s waiver request for the emigration year to allow the Minister sufficient time to review and process any potential reassessment for this deduction beyond the aforementioned reassessment period.

Neal Armstrong. Summary of 11 October 2017 External T.I. 2016-0673171E under s. 126(2.21).