Where a late-filed PLOI election is made prior to the three-year limitation period referred to in s. 15(2.12) or 212.3(12) but no reassessment is issued to the CRIC to reflect the additional interest income under s. 17.1(1) prior to the CRIC’s relevant taxation year being statute-barred, will CRA accept the election as valid?
CRA confirmed that the additional interest not having been reassessed would not preclude the election from being valid. However, s. 152(4)(b)(iii)(A) would extend the normal reassessment period given that the joint PLOI election filing by a CRIC and a corporation that controlled the CRIC, or each “parent” (as defined in s. 212.3(1)(b)), would be an “arrangement or event” and, thus, a “transaction,” as defined in s. 247(1), involving a taxpayer and a non-resident person with which it did not deal at arm’s length.
Where the CRIC and each "non-resident parent" are not related, they nonetheless will not be dealing at arm’s length as a factual matter, so that the Minister would be able to reassess the relevant taxation years beyond the normal reassessment period to include additional interest income for the CRIC.