Effective March 25, 2022, CRA adopted an administrative policy that requires only one PLOI election to be made in respect of each loan or indebtedness governed by the same agreement owing by each non-resident person, with no election being required to be made regarding amounts borrowed under the same agreement in a subsequent taxation year. If the taxpayer does not wish to have a PLOI election apply to amounts advanced after the initial year for which the single PLOI election was filed, is it required to so notify CRA?
CRA indicated:
- If the intention is to treat only certain amounts as a PLOI, then the above policy does not apply, and a separate election should be filed in respect of each separate amount under the agreement.
- Taxpayers who have engaged the policy by making a single election in respect of all amounts made under the same agreement, and then no longer wish for the election to apply to amounts borrowed in subsequent years should ensure that those amounts are governed under a separate agreement.
- The single election to engage the administrative policy is made by checking “yes” in field 100 of Form T1521. Taxpayers who do not wish for the administrative relief to apply should file a separate election for each separate amount and check “no” in field 100 in each T1521 form.