Principal Issues: Whether the condition stated in IT-169 to file a letter attached to the return can be substituted where a rollover form is filed. Whether, in circumstances where no rollover form is required, the condition to file a letter attached to the return is mandatory.
Position: The condition to file a letter attached to the return, as stated in IT-169, can be substituted. Administratively, the CRA does accept a rollover form such as T2057, T2058 or T2059, filed with a "yes" answer to the question concerning the existence of a price adjustment clause, as sufficient notice. However, a price adjustment clause does not automatically amend a section 85 election. In order to give effect to a price adjustment clause, the parties will have to file an amended election under subsection 85(7.1) and pay the penalty under subsection 85(8). CRA's position on that point is the same with respect to an election under subsection 97(2). Consequently, the parties will have to file an amended election under subsection 96(5.1) and pay the penalty under subsection 96(6). Finally, in circumstances where no form is required (e.g., section 86 or 51 of the Act), the CRA has stated that simply not notifying the CRA does not prevent Interpretation Bulletin IT-169 from being applied if all of the other conditions are met.
Reasons: Previous positions.