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). Subsection 249.1(8) requires, inter alia, the particular day that may be elected to end the fiscal period of a partnership must be after March 22, 2011 and before the day on which that fiscal period would otherwise end.
XXXXXXXXXX
2011-042948
R. Ferrari
March 8, 2012
Re: Single-tier fiscal period alignment
Dear XXXXXXXXXX :
This letter is in reply to your email of November 25, 2011 with respect to the eligibility for members of a partnership to make a single-tier fiscal period alignment under subsection 249.1(8) of the Income Tax Act (the "Act"). The enquiry provides the following information as an example:
- A Ltd. and B Ltd. are both Canadian controlled private corporations.
- A Ltd. and B Ltd. each have a 50% interest in a limited partnership ("P").
- A Ltd. and B Ltd. both have October 31 taxation year ends.
- P has an August 31 fiscal period end.
The members of the partnership wish to align the fiscal period of the partnership with the taxation year of the corporations to end on October 31, 2011. You ask whether the members of a partnership may elect to make a single-tier fiscal period alignment under subsection 249.1(8) of the Act to end the fiscal period of the partnership on October 31, 2011.
Our Comments
The conditions to make a single-tier fiscal period alignment election as stipulated in subsection 249.1(8) include, inter alia:
- 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., the fiscal period begins before March 22, 2011 and ends 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 could 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 October 31, 2011.
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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