CRA indicates that, where necessary, a s. 70(2) return can be filed before the filing deadline with an estimated amount of the right or thing

A taxpayer died in October 2021 after reaching a pay equity settlement a few months earlier. The estate received the pay equity amount at the end of 2022 and a T4 for 2022 early the next year.

CRA indicated that the pay equity amount was a “right or thing” at the time of the taxpayer’s death. If (because the amount was not yet ascertained) a rights or things return was not filed on a timely basis (i.e., by the later of one year after the death and 90 days after the assessment of the terminal return), CRA considered that this right or thing was includible in the taxpayer’s terminal return to the extent that “the salary adjustment existed and was determinable at the time of death” – and that, if necessary to accomplish this inclusion, the T1 terminal return should be amended accordingly.

However, CRA stated:

Where it is not possible, for example because of administrative delays, to obtain from the employer the precise amount of the pay equity adjustment payment within the time required to make the election under subsection 70(2) and to file a Rights or Things Return, the CRA will generally accept the filing of such a declaration where the taxpayer declares an amount estimated on the basis of the best information available at the time the declaration is filed. Once the value of the rights or things referred to in subsection 70(2) has been determined with greater certainty, the representative must, if necessary, amend the return.

Neal Armstrong. Summary of 10 October 2024 APFF Financial Strategies & Instruments Roundtable, Q.5 under s. 70(2).