The Canada Revenue Agency has issued this memorandum which contains provisions for two elections that apply to the sale of a business and its assets. The election under subsection 167(1) applies to the sale of a business or part of a business. The election under subsection 167(2) applies to the supply of business assets of a deceased individual. This memorandum examines each of these elections as well as the provisions that could apply where there is a sale of a business that has no commercial activity. It also covers the provisions of section 167.1, which apply to the supply of goodwill.
This memorandum replaces the following GST/HST Policy Statements: P-103R, “Transfer of an Undivided Interest in a Joint Venture”; P-117, “Supply of a Store by a Person Owning a Chain of Stores; P-166, “Sale of Medical or Dental Practice between Two Non-Registrants”; P-179, “Interpretation of a Business that was Established for Purposes of ss 167(1) of the ETA”; P-181, “Amounts for Certain Services and Licences and the ss 167(1) Election of the ETA”; and P-188, “Supply of a Business or Part of a Business for the Purpose of the Election under Subsection 167(1)”.
CRA Memorandum 14.4