Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Can a purchaser file a Notice under subsection 116(5.02) when the purchase price is estimated as of the date of the acquisition?
Position: Yes. The purchaser should report the estimated purchase price on Form T2062C, and note that it is an estimate. If the final amount is different, the purchaser should file an amended T2062C with a copy of the original Notice.
December 8, 2009 TEI - CRA Liaison Meeting
Question 9 - Subsection 116(5.01)
In order for subsection 116(5.01) of the Act to apply, a purchaser must file a notice (T2062C) with the Minister under subsection 116(5.02) on or before the day that is 30 days after the date of the acquisition and must state in the notice the amount paid or payable by the purchaser for the property. Sometimes the purchase price of property, for example shares of a corporation, will include a contingent or variable component (e.g., a post-closing adjustment based on net working capital of the corporation at the time of sale) that is not known until well after the due date for the subsection 116(5.02) notice.
In the event the exact purchase price is unknown at the time the required notice under subsection 116(5.02) is due and the purchaser files a subsection 116(5.02) notice within the required 30-day period indicating an estimated purchase price or a range of purchase prices, will CRA permit the application of subsection 116(5.01)? In the event the purchaser files a subsection 116(5.02) notice within the required 30-day period and the purchase price is subsequently modified, will CRA deny the application of subsection 116(5.01)?
CRA Response
The CRA will consider the purchaser to have complied with subsection 116(5.02) notwithstanding that the amount paid or payable by the purchaser set out on the notice (T2062C) includes a portion that has been estimated. The fact that the amount on the notice includes a portion that has been estimated should be indicated. If the actual amount paid or payable turns out to be different, provided that a revised notice is filed by the purchaser forthwith, the purchaser will continue to be considered to have complied with subsection 116(5.02). To avoid confusion, a copy of the original notice should be attached to the revised notice along with a brief explanation.
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