A Canadian-controlled private corporation (“first CCPC”) with a calendar year end assigns a portion of its business limit (“BL”) to another CCPC (“second CCPC”), having a November 30 year end and deriving income from the first CCPC that is described in s. (a)(i) of the specified corporate income (“SCI”) definition. When filing the first CCPC’s tax return, the amount of the BL assignment will be unknown because of the 11-month difference in taxation years. Would the CRA accept an amended BL assignment when the actual amount can be determined? CRA responded:
[W]here the first CCPC and the second CCPC have different tax year-ends, the amount of the BL available to be assigned may be unknown at the end of the first CCPC’s tax year. In this situation, a reasonable effort to compute an amount would be required at the time of filing the first CCPC’s tax return. When the actual amount is known (e.g., after November 30, 2018), a revised BL assignment would generally be accepted by the CRA, provided that the tax year is not statute-barred.