In the 2017 taxation year, an individual effects a s. 85 share-exchange rollover transaction (with a timely election filing and reporting of the disposition in the return), a s. 86 share-exchange rollover (reported in the 2017) return or a s. 51 share-exchange rollover (not required to be reported) - and received the notice of assessment for that year on April 15, 2018. At what time would such transactions be considered to have become statute-barred assuming no misrepresentation described in s. 152(4)(a)(i) and assuming price adjustment clauses (PAC).
CRA responded:
The statute-barring period requirement relates to the determination of tax consequences for a particular taxation year and not to a particular transaction. … Thus, as soon as a transaction creates legal impacts in a taxpayer's taxation year that are not otherwise statute-barred, the resulting tax consequences may be determined by the Minister. Thus, we are of the view that a taxable attribute, such as the ACB of a capital property, that was determined by a taxpayer to give effect to a rollover that occurred in a statute-barred taxation year, but for which a valid PAC or deeming provision, such as paragraph 85(1)(c), applies, may be adjusted for a taxation year that is otherwise not statute-barred if it has an impact on the tax consequences for that year. On the other hand, although a valid PAC may have retroactive effect, it does not, however, permit the Minister to reopen an otherwise statute-barred taxation year, except where one of the exceptions listed above applies.