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: Whether a single-tier fiscal period alignment election can be made to end on a particular day that is after the day on which the fiscal period would have otherwise ended.
Position: No.
Reasons: The preamble to subsection 249.1(8) and paragraph 248(1)(e).
XXXXXXXXXX
2011-042198
March 12, 2012
Dear XXXXXXXXXX :
Re: Single-Tier Fiscal Period Alignment Election for a Partnership
This letter is in reply to your email of September 21, 2011 with respect to the eligibility for members of a partnership to make a single-tier election under subsection 249.1(8) of the Income Tax Act (the "Act").
You provide the following example. A partnership has two corporate members, A and B. The partnership's fiscal period end is August 31. Both corporations, A and B, have a taxation year end of December 31. The members of the partnership wish to align the fiscal period of the partnership with their taxation year to end on December 31, 2010. You are asking whether the corporate members may elect to make a single-tier fiscal period alignment pursuant to subsection 249.1(8) of the Act to end the fiscal period of the partnership on December 31, 2010.
Our Comments
The conditions to make a single-tier fiscal period alignment election as stipulated in subsection 249.1(8) include, inter alia, the following:
- the partnership has a fiscal period that begins before March 22, 2011 and that would, if the Act were read without reference to subsections 249.1(8) and 249.1(10), end on a day after March 22, 2011,
- the day must end on a "particular day" that is before the day on which the fiscal period would otherwise end, and
- the particular day is after March 22, 2011.
In the example provided, the fiscal period of the partnership that ends on August 31, 2011, is the only fiscal period of the partnership that meets the conditions of subsection 249.1(8) (i.e., beginning before March 22, 2011, and ending after March 22, 2011). If all of the conditions as stipulated in subsections 249.1(8) and 249.1(10) have been met, a single-tier fiscal period alignment election can be made for a particular day that is after March 22, 2011, and before August 31, 2011. Accordingly, in the circumstances described, a single-tier fiscal period alignment would not be permitted to end the fiscal period of the partnership on December 31, 2010.
We trust that these comments will be of assistance.
Yours truly,
G. Moore
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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