Subsection 211(1) - Election for Real Property of a Public Service Body
4 April 2011 Headquarters Letter Case No. 113955
a university which is the registered and beneficial owner of three contiguous parcels of land (A, B and C) reconfigures its ownership so that it is the owner of parcel AB consisting of all of (former) parcels A and B plus a portion of (former) parcel C, and parcel C1 representing the balance.
Such reconfiguration would cause parcels A, B and C to cease to exist for ETA purposes so that fresh s. 211 elections would be required.
RC4082 "GST/HST Information for Charities," 29 June 2010, p. 26
"For purposes of this election, real property generally means the entire estate or interest in the real property (including a leasehold interest) held by the charity and that is contained within a single legal description (which includes the land and all structure and other improvements that are fixtures to the land)."
In the course of discussing whether a charity can register for GST/HST purposes based on an intention to subsequently make a s. 211 election, CRA stated:
We would like to clarify that:
- The election under section 211 is applied on a property-by-property basis (that is, the election applies to the entire legal description and not just to a portion of the real property).
- The deeming rules in paragraphs 211(2)(a) and (b) do not apply where the charity:
- acquires the real property on the day the election takes effect; or
- becomes a registrant on the day the election takes effect.
|Locations of other summaries||Wordcount|
|Tax Topics - Excise Tax Act - Section 141.1 - Subsection 141.1(3) - Paragraph 141.1(3)(a)||registration made on basis of s. 141.1(3)(a) requires clear intention to engage in commercial activity||153|
A charity may be operating as if a s. 211 has long since been filed for a property, but the CRA internal system does not show a s. 211 election and with staff changes and passage of time, the charity is not in a position to demonstrate its filing. Will CRA administratively allow s. 211 elections to be “late-filed” in such circumstances? CRA responded:
The ETA does not provide the Minister with discretion to accept a late-filed section 211 election. Consequently, where the filing requirements as specified in paragraph 211(5)(c) are not met, the CRA will generally not accept a late filed election. However, if a charity has been charging the GST/HST on supplies of real property that would otherwise be exempt and has been accounting for that tax and claiming any ITCs it may be eligible to claim in its net tax calculations and remittances as if the election had been filed in accordance with subsection 211(5), the CRA may accept a late filed-election, effective as of the date the charity began charging the tax, if the charity was eligible to file the election on that date.
HQR0001067 (February 9, 1999) and Q.24 at the February 26, 2009 CBA Roundtable meeting both indicated that if a public service body has been charging GST/HST on supplies of real property that would otherwise be exempt, and has been accounting for that tax and claiming input tax credits (ITCs) in its net tax calculations and remittances as if the s. 211 election had been filed on time, then the CRA will normally accept a late-filed section 211 election. Is this still the policy? CRA responded
As indicated in … 37442 (July 30, 2002) a decision on whether to accept a backdated effective date for a section 211 election falls within the purview of the Domestic Compliance Programs Branch … [which] will only consider the backdating of a section 211 election in exceptional circumstances. Exceptional circumstances include, but are not limited to, situations where a PSB has obtained inaccurate written information from the CRA. The acceptance of a late-filed section 211 election will be determined on a case-by-case basis.