If an election under s. 164(6) results in a refund, when does interest begin to accrue thereon?
CRA noted that given that the election shifts the losses available to be deducted from the graduated rate estate (“GRE”) to the final T1 return, it does not give rise to a refund to the GRE itself. The portion of any overpayment of the tax payable by a deceased taxpayer for a taxation year that arose as a consequence of the deduction of losses relating to such election is deemed to have arisen and, as a result, refund interest would start pursuant to s. 164(3) on the day that is 30 days after the latest of three dates:
- the first day immediately following the subsequent taxation year;
- the day on which the return of income for that subsequent taxation year was filed; and
- the day on which the amended return was filed under s. 164(6)(e).