GST and Estate Practice

Common GST Rules in Estate Supplies

TABLE OF CONTENTS

I. INTRODUCTION 1

II. SALE OF PROPERTY BY PERSONAL REPRESENTATIVE 3A. NON-TAXABLE SALES 3B. POTENTIALLY TAXABLE SALES 5

III. TRANSFERS TO BENEFICIARIES 7A: GENERAL RULE 7B. BUSINESS ROLLOVER 8C. TAXABLE ITEMS 9D. JOINTLY HELD PROPERTY 10

IV. RESEALING OF FOREIGN GRANTS AND U.S. PROPERTY 11

V. MISCELLANEOUS ISSUESA. LEGAL FEES 12B. TRANSITIONAL RULES 12C. EXECUTORS' FEES 13

ATTACHMENTS

December 17, 1990 Release - Tax Free Items for Farmers 14

GST 45 - Deceased Person Election Form 22

COMMON GST RULES IN ESTATE SUPPLIES

I. INTRODUCTION

The portion of the Excise Tax Act (the "GST Legislation") which

deals with trusts and estates is dealt with in Division VII of the

GST Legislation which is headed "Miscellaneous." As with most new

legislation interpretative issues will likely arise with respect to

the GST Legislation. In a paper recently presented on the new Tax

Court Rules by Gordon Bourgard it was stated that in England after

the introduction of the VAT legislation that the ratio of court

cases involving VAT to income tax was three to one. Aspects of the

GST Legislation pertaining to trusts and estates could certainly

fall into the litigious area.

The reason for potential litigation in this area is twofold: 1)

GST is a value-added tax on consumption and 2) the GST Legislation

involving trusts and estates is somewhat elliptical and ambiguous.

In trying to determine what should happen with an estate one is at

times left straddling the general rules in the GST Legislation and

the incomplete rules in the GST Legislation that pertain to

estates.

The GST Legislation is quite clear on what happens up until the

time the assets are vested in the executor or administrator.

However, after that 'time the results are not always clear. The

2

executor may sell some assets, may distribute some assets to the

beneficiaries, and may continue to operate assets while the estate

is being administered or under the terms of a testamentary trust.

The executor may be a professional (e.g. lawyer or trust company)

or more often may be an individual who is not a registrant for GST

purposes.

Normally when determining the GST consequences of a transaction one

looks at the nature of the asset, what the asset is being used for,

the nature of the vendor, and in some cases the nature of the

purchaser. For example, the sale of a used motor vehicle by a car

dealer is taxable whereas the sale of a used motor vehicle by a

private individual is generally not taxable (not being in the

course of commercial activity as defined). When an estate is

involved these distinctions become even more blurred. For

instance, does the fact that a trust company rather than an

individual is an executor change the sale of personal assets from

the deceased's estate from non-taxable to taxable since arguably

the trust company is engaged in a "commercial activity?"

This paper will attempt to demarcate areas of certainty and provide

an analysis of how uncertain areas should be treated. Over time it

will be interesting to see if subsequent legislative amendments or

court interpretations fill in some of the gaps.

\/

3

II. SALE OF PROPERTY BY PERSONAL REPRESENTATIVE

In some cases the will may direct that some or all of the property

of the estate be sold and in other cases the executor may be forced

to sell some or all of the estate property to satisfy outstanding

debts of the estate. The GST Legislation is silent in respect of

the sale of estate assets so presumably the general rules in the

GST Legislation apply to determine whether the executor is making

a taxable supply. Paragraph 267(1) (d) states that where at any

time an individual dies and immediately before that time was

engaged in a commercial activity the executor shall be deemed to be

engaged in that activity immediately after that time. This

suggests that the executor's status is to be determined from the

status of the deceased and not from his own status. Therefore, it

should not make a difference whether an individual or a trust

company is th~ executor of the estate.

A. NON-TAXABLE SALES

Regardless of whether or not the executor is or is deemed to be

engaged in a commercial activity the sale or disposition of the

following assets will not attract GST:

- money, bank accounts - see definition of "property"

- shares bonds, debentures - see definition of "financial

4

instrument", "financial service" and Schedule V, Part VII\I

insurance policies and annuities

"financial instrument"

see definition of

RRSPs, RRIF's etc.

instrument"

see definition of "financial

trust or partnership interests

"financial instrument"

see definition of

- mortgages on any type of real property - see definition of

"financial instrument"

- residential real property - Schedule V, Part 1, Section 2

mobile homes - see definition of "residential complex"

recreational real property in the name of individual -

Schedule V, Part 1, section 9

- agricultural produce and prescribed agricultural equipment

Schedule VI

attached)

Part IV, December 17, 1990 Release (copy

- farmland to certain related individuals and corporations -

Schedule V, Part 1, sections 10 - 12.

- resource property - section 162

- foreign property - not a taxable supply made in Canada - see

section 142, 144, 165

- jointly· held property - not part of the estate - not a

supply

In the foregoing cases a specific exemption is applicable and

provided that the requirements of the exemption are met no GST is

exigible. \)

5

B. POTENTIALLY TAXABLE SALES

The next category of items would be things such as automobiles,

jewellery, household effects, antiques and so forth that were not

used in the course of commercial activity by the deceased. The

answer here is less clear on accout of subparagraph 267(1) (d) and

on account of the definition of "commercial activity" in subsection

123(1). Suppose the owner of a sole proprietorship dies.

Subsection 267(1) (d) deems the executor who is an individual to be

in that same business. Since the personal effects were not used in

the business by the deceased then arguably no GST is applicable

since the executor is not otherwise carrying on a "commercial

activity." In the case of a trust company which administers

estates as part of its business arguably the sale is in the course

of commercial activity. However, the better view is that based on

subparagraph 267(1) (d) that the determination of commercial

activity should come from the use of the assets by the deceased and

not the statu,s of the executor. Therefore, no tax should be

exigible on the sale of tangible personal property. However, the

sale of real property is deemed to be a commercial activity so

unless the property is used residential or personal real estate GST

would be exigible but in these cases the obligation to remit the

GST would normally fallon the purchaser (ss.221).

To the extent that the assets do consist of personal property that

6

was used in the course of commercial activity the executor would

normally be obligated to collect and remit the tax (subject to the

all or substantially all election) .

The all or substantially all election is available pursuant to

subsection 167(1) and could be applicable on the sale to outside

parties. This is different than the subsection 167(2) election

(which will be discussed below) that applies on the distribution of

business assets to beneficiaries under the will.

Where real property is purchased by a registrant or the vendor is

non-resident the obligation to pay the tax is on the purchaser

under subsection 221(2).

Memorandum 200-7 states that Revenue Canada is to be advised when

a registrant has died. Memorandum 200-8 states that the deceased's

registration should be cancelled. However, it is my understanding

that where the estate is simply being wound up that the deceased's

registration ~umber can continue to be used by the executor. In

the case of a testamentary trust the trust would have to become

registered if it was carrying on commercial activity.

7

III. TRANSFER TO BENEFICIARIES

A. GENERAL RULE

While paragraph 267(1) (a) makes it clear that no tax arises on the

passing of property of the deceased to the executor the GST

Legislation is not entirely clear what happens when property is

distributed to a beneficiary.

As discussed above (para II A) much of the property (such as cash,

stocks, bonds and so forth) which would be distributed to a

beneficiary wou;Ld not be subject to GST in any event. The

following is an excerpt from the Revenue Canada Q & A Database:

Q. Will the GST have an impact on inheritance of capital

property and real property?

A. Under the GST, the distribution of taxable property from

a trust to th~ beneficiaries is a supply of property, the value of

which is the amount determined under the Income Tax Act to be the

proceeds of disposition. Thus, the GST will be charged on that

value.

The foregoing, of course, would only be true where the supply is a

taxable supply. The foregoing also indicates that an estate would

be able to avail itself of section 269 which states that "where a

8

trustee of a trust" distributes property that the consideration is

deemed to equal the amount determined under the Income Tax Act to

be the proceeds of disposition. Therefore, in the case of a

transfer of property from the deceased spouse to the surviving

spouse where a spousal rollover is utilized the GST would be on the

tax cost and not the fair market value. Similarly, where the

executor has elected under subsection 70(6.2) of the Income Tax Act

for the spousal rollover not to apply then the GST would be on the

elected amount.

B. BUSINESS ROLLOVER

Subsection 167(2) permits any asset that was used by the deceased

immediately before his death in business to be transferred by the

personal representative in accordance with the deceased's will or

intestacy laws to be transferred tax free to the beneficiary if the

property is received for business purposes by the beneficiary and

the beneficiary is a registrant. It is also necessary for the

personal representative to file an election (Form GST 45) (see

attached) . It not previously registered the beneficiary should

register (Form GST 1E) prior to filing the election.

This election is broader than the "all or substantially all

election" in that it applies on an asset by asset basis. It should

be noted that subsection 167(2) uses the term "personal

representative" which is not a defined term. Section 267 uses the

term "executor," which is defined for purposes of section 267 in

9

subsection 267 (2), even though the marginal note uses the term

"personal representative." Presumably personal representative

used in section 167, executor used in section 267 and trustee used

in section 269 are all one and the same!

C. TAXABLE ITEMS

So, for the most part assets owned by the deceased are either tax

exempt 'or would eligible for the business rollover. The exception

wo~ld be personal items of the deceased that are taxable or items

that were business items of the deceased but that are not going to

be used in business by the beneficiary. An example of the latter

might be art or antiques collected by the deceased for investment

that are used by the beneficiary for personal use or a farm pick-up

truck that was used by the deceased in farming and by the

beneficiary for personal transportation.

Section 165 imposes GST on a "taxable supply" made in Canada.

"Taxable supply" is defined in subsection 123(1) to mean a supply

made in the cpurse of a commercial activity. In most cases the

supply of personal property by an individual executor would not be

a commercial activity since there is no reasonable expect ion of

profit. An argument can be made that a supply by a corporate

executor would not fall within this exception although based on

paragraph 267 (1) (d) the status of the executor should not be

determinitive. However, a supply of real property is deemed to

be a commercial activity and as such all distributions of

10

commercial property by individuals or otherwise except used

residential housing and personal-use real property will be subject

to GST. Normally the subsection 167(2) election would be available

for commercial real estate but it is possible that cases could

arise where commercial real estate owned by the deceased would be

used for personal purposes by the beneficiaries. The liability to

pay GST is technically on the beneficiary. In future, wills should

address what is to happen if it appears that GST could be

applicable on distribution of estate assets to the beneficiaries.

If it were a requirement that the beneficiary pay GST then arguably

the property would not vest indefeasibly in the beneficiary as a

gift as required by certain rollover provisions of the Income Tax

Act. The transaction could be treated as a purchase rather than as

an outright gift which would leave the beneficiary with a low

adjusted cost base under section 69 of the Income Tax Act. This

would certainly be an unintended result but could be avoided by

having the estate making an additional bequest to pay the tax.

D. JOINT PROPERTY

Another issue that will quite likely often arise is whether the

transfer of assets held jointly or with right of survivorship will

attract tax on death. In most cases such jointly held assets are

exempt (e.g. bank accounts, principal residence) but the GST

Legislation does not contain specific rules dealing with jointly

held prope~ty. Such assets would not form part of the deceased's

estate and as such would not be administered by the executor. It

11

is my submission that the transmission of jointly held property or

property with a right of survivorship to the survivor does not

constitute a disposition and as such is not a "supply" as defined

in subsection 123(1).

IV. RESEALING OF FOREIGN GRANTS

It often occurs that a person who is not resident in Saskatchewan

owns property in Saskatchewan on death. In order to get the

property transferred to the executor it is necessary to reseal the

foreign grant of probate in Saskatchewan so that the property can

be dealt with. Where the deceased is resident in Canada the normal

GST rules apply on the sale or distribution of the property by the

executor. Where the deceased is not resident in Canada and the

beneficiary or purchaser is resident in Canada the normal GST rules

also apply and GST may (subject to the various exceptions discussed

above) be exigible since the taxable supply would occur in Canada

(section 142). However, where the beneficiary or purchaser is not

resident in C~nada or both the deceased and the beneficiary are not

resident in Canada no GST should apply for personal property

(Schedule VI, Part V and section 142) or real property (subsection

221(2)). The converse is also true that a resident of Canada may

own foreign property on death. This would not be subject to GST on

sale or distribution.

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V. MISCELLANEOUS

A. LEGAL FEES

Surrogate Court fees would be exempt from GST under Schedule V,

Part VI, para. 9 provided they are incurred by the lawyer as agent

for the client. For the most part all legal fees are subject to

GST which will normally be a direct cost to the estate since the

estate will not normally be able to claim input tax credits except

where it is carrying on a commercial activity. One exception for

legal fees is to non-residents as described in Schedule VI, Part V,

para. 7 but this does not apply where the service is in respect of

real property or tangible personal property ordinarily situate in

Canada. Most estates would fit into the foregoing category and

therefore most fees to estates of non-residents would not be

exempt. Also, in a recent ruling from Revenue Canada we have been

advised that "real property" includes resource property. Even

though the transfer of resource property would not be subject to

GST on account of section 162, services in respect of them are

subject to GS~.

B. TRANSITIONAL

The Notice of Ways and Means Motion dated March 17, 1991 clarified

that pre-1991 fees in respect of estates that could not be billed

prior to the transitional period (end of April - s. 341) on account

of requiring judicial or other approval of the accounts would.

continue to be tax .exempt notwithstanding that they were billed )

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after the transitional period. While the Notice of Ways and Means

Motion does not detail how the pre and post 1991 breakdown should

occur it is suggested that as most lawyers keep track of their time

they should use that as a basis for allocation even though the

ultimate fee may be based on a tariff.

C. EXECUTORS' FEES

Executors fees are definitely taxable if they are earned by a

lawyer or other professional. However, an individual who receives

executors fees (which are either set out in the will or based on

the value of the estate) may not be required to collect GST if he

otherwise fits within the small supplier category. Based on

section 148 the $30,000 limit is determined by look at the total

amount of taxable supplies the person renders in a period - as

opposed to on a business by business approach. It is unlikely that

the role of executor would be considered an "office or employment"

so as to be excluded from the definition of commercial activity.

Executors fee,s are normally taxable as income so it would be

difficult to argue that no reasonable expectation of profit existed

which would also remove the fees from the definition of commercial

activity. Therefore, whether or not the person is required to

collect GST would most likely depend on whether the person was

otherwise a registrant except in the case where the fees exceeded

the small supplier threshold in which case GST would likely apply

in any event.

Immediate release

FURTHER DETAILS ON THE GST ANNOUNCED

Ottawa, December 17, 1990

90-168

The Honourable Michael Wilson, Minister of Finance, today announced the

contents of the prescribed list of tax-free items for farmers and

fishermen.

"As I first indicated in the December 19, 1989 Technical paper, a prescribed

list of selected major items would be developed which would be tax-free to

reduce the cash flow burden for farmers and fishermen when these large·

items are purchased" the Minister said. "I am pleased to release the

contents of the final prescribed list, which is sUbstantially expanded from

the preliminary list released last spring. This list reflects the many

months of extensive consultation with farming and fishing organizations

across the country."

The regulation giving formal effect to the prescribed list of tax-free items

for farmers and fishermen will be published in the Canada Gazette at the

end of December along with the other regulations relating to the GST

legislation .

For further information:Susan CullenDepartment of Finance(613) 992-1275

Canada

Don OrthRevenue Canada(613) 954-5127

)

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BACKGROUNDER

Prescription of Zero-rated Items for Faraers and Fishermen

Regulation Under Schedule VI I Part IV I Section 10

Part IV of Schedule VI of the Act specifies that prescribed items acquiredby farmers and fishermen which will be zero-rated. The governmentdeveloped the prescribed list in recognition that the normal operation ofthe tax in the farming and fishing sectors could cause cash flow problemsfor producers, particularly when big-ticket items are purchased.

The government consulted widely to select appropriate items to be includedon the prescribed list of tax-free items. A preliminary list was developedand formed the basis for consultation with a wide variety of farming andfishing organizations across the country as well as provincial governments.The attached list includes the items added as a result of theseconsultations.

In addition, in developing the prescribed list, the government recognizedthat a key concern for equipment dealers and suppliers to the farming andfishing sectors is the administrative difficulties which arise from havingto administer a list of tax-free items. As a result, the prescribed listrepresents a balance between the· cash flow concerns of farmers andfishermen and the complexity concerns of suppliers to the farming andfishing sectors.

Making selected major items used exclusively by farmers and fishermentax-free will eliminate the cash flow problem when these big-ticket itemsare purchased. Overall, when these items are combined with the farming­and fishing-related products already zero-rated under the legislation, anycash flow difficulties resulting from the normal operation of the tax willbe greatly reduced. For example, it is estimated that the average farmerwill pay GST' on only about one-quarter of his or her operating expenses.

Overall, the replacement of the existing federal sales tax with the GST willprovide significant benefits to both farmers and fishermen. This is becausethey currently pay federal sales tax on many of their inputs - - eitherdirectly or indirectly. Under the GST, they will get up-front relief onselected major items and will be able to recover all GST paid on otherpurchases used in their farming or fishing operation. Effectively thismeans all federal sales tax will be removed under the GST system. In fact,the tax savings for farmers from the removal of the FST will amount toapproximately $250 million annually.

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PRESCRIBED LIST OF TAX-FREE ITEMS FOR FARMERS

A. EQUIPMENT

Tractors:

Tractors designed for farm use having a rating of 44.74 kW(60 PTO HP) or more

Harvesting Equipment:

Self-propelled or pull-type combines, swathers, and wind-rowers

Headers for combines, forage harvesters, swathers or wind-rowers

Combine or forage harvester pickups

Forage harvesters

Mechanical fruit or vegetable pickers or harvesters whenself-propelled or tractor mounted

Tillage Equipment:

Mouldboard plows with 3 or more furrows

Disc .plows with 3 or more furrows

Chisel plows and subsoil chisels with an operational width 2.44 m(8 feet) or wider

Discers with an operational width 2.44 m (8 feet) or wider

Rod weeders with an operational width 2.44 m (8 feet) or wider

Field cultivator with an operational width 2.44 m (8 feet) orwider

Row-crop cultivator with an operational width 2.44 m (8 feet) orwider

Combination discer-cultivator with an operational width 2.44 m(8 feet) or wider

Rototillers and rotovators with an operational width 1.83 m(6 feet) or wider

Harrows (when sold in complete units) with an operational width2.44 m (8 feet) or wider

)

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Pulverizers with an operational width 2.44 m (8 feet) or wider

Roller mulchers with an operational width 2.44 m (8 feet) or wider

Rotary hoes with an operational width 2.44 m (8 feet) or wider

Seeders and Planters:

Airflow seeders

Grain or seed drills with an operational width 2.44 m (8 feet) orwider

Farm-type row-crop or toolbar seeders and planters designed toseed two or more rows at a time

Haying Equipment:

Mower-conditioners

Hay balers

Hay cubers

Bale throwers J elevators or conveyors

Hay rakes

Hay tedders

Hay conditioners, crushers or crimpers

. Swath turners and wind-row turners

Grain Handling and Processing Equipment

Grain bins or tanks with a capacity of 181 m3 (5000 bushels) orless

Transportable farm grain augers and utility augers

Bin sweeps or cleaners designed for attachment to portable farmgrain augers

Farm tract9r-powered pneumatic grain conveyors

Farm-type roller mills, hammer mills and other farm-type feed mills

Farm-type feed mixers

Farm-type feed grinder mixers

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Farm-type feed grinders, including tub grinders

Ensilage mixers

Farm-type grain roasters for use in livestock feed production

Self-propelled feed or ensilage carts

Miscellaneous:

Assembled, fully operational milking sytems consisting of areceiver group, vacuum supplier, pulsators and related equipment.

Individual components of a milking system that consists of areceiver group, vacuum supplier, pulsators and related equipment,when the components are supplied together unassembled and, onceassembled, constitute the fUlly operational milking system.

Farm-type bulk milk coolers (refrigerated)

Mechanical rock or stone pickers

Rock rakes, rock or root wind-rowers

Self-propelled, tractor mounted or pull-type field sprayers ordusters incorporating a total tank capacity of 300 litres (66gallons) or more

Forage blowers

Silo unloaders.

Liquid, box, tank or flail manure spreaders

Injection systems for liquid manure spreaders

B. FERTILIZER

Fertilizer (including solutions) when sold in bulk quantities of 500 kgor greater.

C. LIVESTOCK FEL'7Jl

Complete feeds, supplements, or micro and macro vitamin-mineralpre-mixes labelled in accordance with the Feeds Regulations for farmlivestock, fish or poultry when sold in quantities of 20 kg (44 lbs) orgreater.

By-products of the food processing industry and plant or animalproducts ordinarily used as feed ingredients for farm livestock orpoultry when sold in bulk quantities of 20 kg (44 lbs) or greater or inbags containing at least 20 kg (44 lbs).

\)

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- 5 -

D. SEEDS

Seeds in their natural state or treated for seeding purposes when soldin quantities greater than that ordinarily offered for sale toconsumers.

E. PESTICIDES

Pesticides labelled in accordance with the Pest Control ProductsRegulations as having a purpose that includes agricultural use and aproduct class designation other than "Domestic", when the total cost ofall pesticides included on a single invoice is at least $500 (excludingtax) .

F. QUOTA

Sales of quota between registrants where the quota isauthorized by a government agency or marketing board in respect of anagricultural product which is itself zero-rated.

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A. FISHING BOATS

Fishing vessels when purchased for use in commercial fishing by apurchaser providing the following documentation to the vendor atthe time of sale: .

A. The GST registration numbe~ of the purchaser; and.. .. . .

B.. A one-line declarati9n signed' by the purchaserstating that the intended use of the vessel is forcommercial fishing by the purchaser; and

C. A fishing license number as follows:

i)

it)

iii)

iv)

On the Pacific Coast - - for a commercial fishing licenseissued by Fisheries and Oceans (F&O) Canada to thevessel being purchased or to the purchaser (licencecategc,ries D, P, or Z will not qualify).

On the Atlantic Coast - - for a commercial fishinglicense issued by F&O Canada to the purchaser (licencesto harvest marine plants or to fish for mussels,oysters, shark, smelt or squid will not qualify); andthe Commercial Fishing Vessel Number (CFV) for thevessel being purchased.

In the Territories - - for a commercial fishing licenseissued by F&O Canada to the purchaser.

In the inland fishery - - for a commercial fishinglicense issued by a provincial government.

B. NETS AND RELATED EQUIPMENT

webbing for gill-netsleadline for gill-netscorkline (top rope) for gill-netsfloats for gill-netsgill-net drums

Seines

,webbing for seinesleadlines for seinescorkline (top rope) for seinesfloats for seinesseine drums

\.I

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- 7 -

Trawl nets

webbing for trawl-netsleadlines for trawl-netscorkline (top rope) for trawl-netstrawl-net drumstrawl-net doors

Miscellaneous

long-line drumsentrapment webbingpredator webbing

c. OTHER· EQUIPMENT

automatic baitersautomatic jiggersmechanical net washersautomatic netpen feedersmanufactured netpens for use in aquaculturepescalatorsfish feed - as defined in the Feeds Act

22

A· IDENTIFICATION RENSEIGNEr.1ENTS GENERAUX, l. , ~ <._

...' s::::;:~ =:.c:=..'SUPPLY OF BUSINESS ASSETS OF DECEASED

FOURNITURE DES BIENS D'ENTREPRISE D'UNE PERSONNE DECEDEEELECTION CONCERNING THE SUPPLY OF ASSETS OF A BUSINESS OF A DECEASED PERSON

CHOIX VISANT LA FOURNITURE DES BIENS D'ENTREPRISE O'UNE PERSONN£ DECEDEE(Sub_Ion 167(2) of the bel.. Tax AC1· Paragraphe 167(2) de Ia Lal aur Ia tax. d'aeel..)

TIi$_.insaadby ..._oI ti.oExc:isoT....... ·CeIlo_ ... _porlt ....... '*'__.. ~dtltloi'.. ltlll.d""'"

;;GS"'T;';_;::':::;:_:;:::;'N:-"","''''=''''''''''_=_='---'~ d'll'1scnptlOn aUli lin, Of It. TPS (s',1 y a 1*11

2. Tramng Name (if dtfferem frofn-abovel- Nom commeraal (51 dlfferent de celul Q·deSSUl)

3. Mailing AddIess • Adr.sse postale

10. Tracing Name (if difflll'ent from above) . Nom commercial (Si different de celul ct·dessus)

4. Contact Person· Personne ressource

7. ype of BuSiness· Type d'entreprise

S. TiUe • Tilr.

O EllInlll OF-A...... · Fronqolo

11. Type of Business' Type d'entrepRS8

12. Name 01PorsonaI~.· Nom du ,__not 13. Title· Titre

14. Mailing Address . Adr_sse postale

Clty·v~ ...... 0-.0-...... 15.Totoonono·T~ 16Languageol_ OEnglllIl() ~ Irit«" AngIoIo OF­

Fronqolo._Io ....-'.__.....-_.__oI_I-.g __....- .Zto ...

", lI' ....-.,....._ _."" , _ _ _11'1..

C· ELIGIBILITY ADMISSIBILITE

18_ Did IhtdecNsed I'lOICIIhe assets IdtSCntled Il'I Part OllorCOftSUl'T1lbOn. U$8 Of supply In tt'lt course 01 a tJusqss eameclon tmmelNtety bekwt death? [] YISLa personned6c6d6tditenllC.... 1tS bteftSdtcntsdans II PIl'bI 0 PlU'~ lAiIlsItIonou lOw'rIUtaans IeCllh crune enuepnse tJPll*t~ avane san cMc:ts. Qua

11.III1l1s~a,_",'.

Le b6Mfiaaif. Ist·il insc:m?

19. Is 1I'lt$t4lPly madelO!tlIsbenlfioaty III ac:cordwaWltll thtdlCeasICIlndMClull'S .... Of the lawS ,elating 10thi' sue:te!$IOIl ot property ondNttl?La foumrtute tst.... ettecluie encontormrtt lYle leleStM'ltntdt IIptl"SOI'\I'Ie 06c6dN au avec II~sur la transtr'lSSlOf\08S bIenS auOlCis?

D YOOQu;

20. M the assets 1deSa'Ced In Part 01 t8CtNtd ~ thlsbenefioatylot~. use Of~ It'lh lXlUISe otc:ommeroal aetMbeSot the benehoary?

lIS bltnS dtcnts dim II partie 0 sort·tIS ''9JS PI' Ie b6ni6caaltlpour consornrnatIOn, utlIISItJOn au toumIute dans Ie cadttlM SIS aetMtts cornmet'oaIeS? O Yes 0 NO.Qui Non

OescnptlOn 01 the Assets Supplied - Oescription des biens lcumlS(tt necessary. contlnwon a sepal•• sneet Of 08IPt'l". Au bMoln. ubhMl une let"" ~talrel

..,JoInIJ_,....._ll1\2l....._T·......• I__...:... _=,........';:··Lol..·._:__ ~It,.,.DI _tCl!!t lil,.,. _ _ ...__ ,.,..._•• ., _ ••110..,.,........ _ -,.... _ .. _ _ ... pII1ItD•• ..... ltpll1lt _ ..._ __ Itlllt__ . . __ ...__ _ ••__

• •We.lhebeneflo.-yltldthtprll"SOl'lal~oIthtdlC8lSlld.IQlI"ItIy..,.jlU(SUit'IIlO I' _'6712IlM l Ialll' '. tall III6t~16712Iotthte.ClStTuAct.tohlvtltlt~oflfltassets(dlsctmedbelowloflbu$lnessof COt\fOInI.enYef1UdUpar__ ,II Olsur e(l~.llOUtquaucunt. ent SCd paythe dIeNsId I)tf'SOn IdtnhIiIcLItI Part B Sl.JPPMdWllh now payaOIt ancIlO hive rhtbllt'lttloaty4Mmed 10 relatlYemenl.1a Jclun'Mute.deS biens dtnlrepnse (deems Q-aortsllM Ia QtrSOnne dtctdtt VISIt dans II

hI¥e aaprldtht assets Jot use '1Ci.JSHttr Itlcomtn1tC111ldMb1S :::~t'l:==~reput.lYOlt a<QJrs cas !;lIenS pout Ies utlkSef '.clISIVefneI1ll dans Ie

Reporting period lin respect of the deCeased's buSfnHS) an wtucn the lfansactlOn occurred:

Plkiode de dkIarabOn (telahYe" I'enttepnsede Ia persanne cMc6dH1 au cours de laqueHe .... From. De : M 0 J

l'optratlOfl a eu IHtu

Date on whk:h the SUppty I. to be rI'I8de:Data de m'" en vIgueur de c:e cholx :

CERTIFICATION ATTESTATION

I ,wei herBy certrl'y that the ,nlOrmatlon gr.oen on IftIS Iotm and III InY doculMnl attached ..m 'ItSDKIIOthe. deC4I&sed IS tnM. eotrect and complete It! e'ttIY ,~to the bnl 01 my lOUt')~ II'lClltlail am

,..... "I lor I am I..... ¥el aulnOnZ*' to S9" on blhalt of) the~ represenlatlYelsl of the cM<:easedJ'anest. lnous al1ntons) par ... prewn.. que IeS'en~ lou,nll dans c.fta 10000uie al clanS IOUI

autre dOaJmenl an.,.•• se,~ ••• petSOnM cMciOte sont v'''s. a.acls .. con'lP'etS • Ioul In~. au metlleu' (Ie m. {noll.) connarUanOa. et que lit SUIS (nous semmeSI Ieisl (eptasentanlts)pettOtlnfIllS! (Ie" paBOrII'le d6c»cMe ou que lit lUIS Incus scmrnnl au1OnSt(Slii S9* en san lleurl nom

I (.".1 hefetPt certrIy thai me II\lonn.atlon gIVen on !t'1S Iotm anclll"l any documen! anached WIth (espect

to ttIe~ IS true. coneet al'lCl C()l'I'lpiltte In ....8fV lespect 10 t1'Ie bnt 01 my lourl knowledge ancl

.thall am twe atll)IOf t am {we aIel authoozecl 10 s.gn on benalt OI)ll'Ie be!"ehClaryloes,

J'an.... lllOV$ "neslonsl par la Pfe$ente que Ills renseognemenls lournll Gat'tS cen. IOtmule 81 (JoinstOUl au". c:Jocument anne.e se r~ant au benehera". sont v.a.s. e.acts el comP'ets a IOuS 1M~. au IfMttlIeuI (Ie malnottel connarss.tnClllll QI.It,. SUIS (nous sommesllell) benellClal'e{.1 auque ,. SUIS lnoul SOtnmMl au1orlM(sl a srgnet en son llllull nom

. ....-'. _01_..-_.__01_.ny....... d".............. ,........OUIlft ~.,................... JJ ',.,.....

1

0 ...

Y A I ... I D·J

10 ...

I Y, I ... I OJ

)PersonallntonnatlOn provtded on rtHS form .s protected undet the J)(0VlS1OftS 01 the Pnvacy Act and IS maintaIned In Personalintorma1JOn Bank RCC/P·PU·065Les rensergntm«ltS personnels lourntS daM II. pr6sen,e tonnule sonI prot6glh en venu de II lOt sur Ia prOieclion ores ,ensetgnemenls petsonnelS 81 sonlc::ot'IMfWs dans Ie FiChier des rensetgntments personnets RNO/P·PU·065.

_-........-. ...... _bo_toyaurlocollb...._.·F_....- .._cIo_._.......... _locoIcIol·_.

05T4.5,1QI121

~ 90-410 © 1991, CCH Canadian Limited

23

INSTRUCTIONS FOR COMPLETION OF THE ELECTION FORMINSTRUCTIONS POUR REMPUR LA FORMULE DE CHOIX

PART A • IDENTIFICATION (BENEFICIAllY)

This part should be COmpleted by the beneficiary who is an individualand a registrant.

Enter the beneficiery's GST registration number (if applicable) in thespace provided.1. Enter the beneficiery's complete legal name.2. Enter the beneficiary's Irading name (n any).3. Enter the beneficiary's mailing address.4.. 5.. 6. Indicate the name, IitIe and telephone number of the

person who has knowledge of this election.7. Desaibe the type of business activity for which the

benefici8ry is regisllr8d (a.g., hatdwate retailer. golf dub).

8. Indicate the official language of preference.

Nota: Where il involves a group of beneficiaries, attach a separatesheel of __a each beneficialy, or an authorized individual,

musl provide tha intannation as requested in Part A and sign theCartification Part.

PART B • IDENTIFICATION (DECEASED)

This part should be completed by the personal represantative of thedeceaa4id.

Enter the deceased's GST registration number or any other GSTnumber in the space provided.9. Enter the oompIeIe legal name of the deceased.10. Enter the trading name of the deceased's business

(nany)., I. Desaibe the type 01 business activity thaI tha

deceased carried on (a.g.. _ 01 elactrical

goods, lawn care).12..13..14..15. Indicate the name, litle, mailing -... and telephone

nUlNlar 01 the P8fIOrt who is the persoNlIrepresentative of the deceased and is Il1lII<ing thiseIaclion on beh8Il of the deceased.

, 6. Indicata the offici8Ilanguage of preference.

PART C • ELIGIIlUTY

17., 18.. 19. and 20.The ans-a to these questions wiN determine n you are en_ to_ this eIaction.

PART D· ELEC110N

Enter the start and end dates of the~ period (in respect 01 thebuSll18SS fonne<ty carried on by the deoeased) In _ the transler tothe beneficiary 1001< place.

Provide a general datcription of the _ being trwIS1emId.nnecessary continue on a sapItata _ 01_.

Enter the data upon _ the supply will take place.

CEIlTlFlCATION

Please ensure that the certification is signed by the personalrepresentative and the beneficiary '" by parsons who are authorizedto sign on beh8Il 01 the personalr~ 01 the _ andon beh&n of the benefici8ry.

In lhe case of a group of individuals aN 01 whom are beneficiaries ofthe same assets. please ensure thai each beneficiary has signed theeIaction form. Use and attach a I8paIaIa _ 01 _.

In the case of particular _ transl_ til each beneficiary, please

ensure that each beneficiary signs and submits a _ata eIactionfonn in respect of the particular assets.

Where there is more than one personal representative of thedeceased P8fIOrt, please ensure that each persoNlI representative.or an authorized individual, has provided the intormalion rellected initems 12 to 16 in Part B of the form and has signed a certiflcation ..presented In the certification Part 01 the eIaction form. Usa and attacha separate _ of_.

PAIlTlE A • IlEHSElGHEIIEHTS oetEllAUX (BI!tEFICIAlIlE)

Gette partie devrait 61re remp/Ie par Ie b6n6ficiaire qui est un partieulier elun k\Sait.

Insenvez volre numero d'inscriptloil aux fins de la TPS (Ie cas kh6ant)dans I'espace pr6vu acalle fin.1. Inscrivez Ie raison sociaIe au complet du b6nM1dai<e.2. Inscrivez Ia nom commercial du b6n6ficiaire (s'll y a lieu).3. Inscrivez radresse postale du b6n6ficiaire.4.. 5., 6. Inscrivez Ie nom. Ie titre et Ie numero de telephone de la personne

qui a OOIlnaissance du choix.7. D6criYez Ie type cfaetivit6 commerdaJe pour laquella Ie

b6n6ficiaifa est insc:ril (par example, vente au d6IaiI dequincail_, dub de goIf).

8. Indiquez Ie langue otflCiefla de votre choix.

Nol.: Dans Ie cas d'un groupe de b6n6ficiaires, joindre une lauilledistincte renfarmant Ies donn6es d'ldiantification de chaque particuliar tllliesque requiSes *la partie A, el demandar achaque :l8nlificiaint de sigrw Iecasedel'lIIIlIslalion.

PAIlTlE 8 ·IlEHSElGNEllENTll oetEllAUX (PEIlSONHE DicEDU)

Gelte partie devraat 6tre remplie par Ie reprl..ntan' par_ de lapersomad6c:6d6a.

Insenvez Ie num6ro d'insenplion aux fins de I. TPS de· Ie parsonned6c6d6a dans I'espace pr6vu a eatte fin.9. Inscrivez Ie raison _ au compIeI deIe_

d6c6d6a.10. I_zIa rtO<n oornmen:iaI de Ie _ d6c:6d6a

(s'll y a lieu).11. D6crivaz Ia typad'__qotexen;aat Ie

_ d6c:6d6a (par ell8mple, _ an _

d'aocasaoiras 6lactriques, entretien de palouse).12..13..14.,15. Inscrivaz Ia rtO<n, titra, admu"'**aI num6lo de

t6l6phone du repr8santant de la _ d6c:6d6a, qui

exerca Ia choix pour Ie coll1lle de C8l1a-ci., 6. Indiquez Ie langue officielIe de VOIre choix.

PAIlTlE C • ADMI8SIlIlIJ1t

17.. 18.. 19. et 20.La r6p0nse *cas questions P8fmet de d6tarminar 51 vous 'Ies adI'IliUibIaau choi•.

Inscrivez la data du dtbut et de Ie fin de Ie p8riode de d6c1aralion (deI'_eprise _nemanl exploit" par la parsonne dtlctdta) duranlIaqueIa Ia transfart des aetiIs • au lieu.

Vauillaz faira una desaiption gtn6rala des _ transf"".Ajoutaz au basoin une leuilla s8parM.

Inscrivez Ie data *Iaquelia Ie toumnure Mfa elt8C1Uta.

ATTESTATION

Veuillaz vous ..surer que I'altestation est sign" par Ie repr6sentantpersonnet e.1a b6n6ficiaire ou des _ au_ a signer en leurrtO<n.

Dans Ie cas d'un groupe de b6ntficiaires des mamas aetils, veuilier a caque chaque b6ntficiaira appose sa signature. Utili.., au besOIn una f8Ui11edistincte.

Dans Ia cas de biens pr6cis transl"" • cheque b6n8ticiaire, veuuler a ceque chequa b6ntficiaira appose sa signature e' produise une formuladlstincla pour Ies biens vi,....Lorsque p1USieurs personnes repr6sen1ent la parsonne d6c6d6a. _ aca que chacune. ou a ca qu'une persoma aulrement au_. foumisaeles rensalgnemenlsde~ aux nu,""os 12 • 16 de la partie B de laformula. 81_sa signature ala case de I'attestation. Uti_ au beSOtn

une leuilla diatincle.

Canadal

Canadian Goods & Services Tax Reports ~90-410

DEFlNf1'lOHS

24

ELEcnON CONCERNING THE SUPPLY OF ALL ORSUBSTANTlALLY ALL OF THE ASSETS OF A BUSINESS

DESCRIPTION OF ELECTION

When a business changes hands, a joint eleclion may be made by two registered principals to heve the transaction not subject to theGST.

This means thet on the sale of all or substantially all of the assets of a business. the sUpplier and the recipient may jointly agree thetno GST will apply in respect of the supply of these assets. The recipient will not be en@ed to claim an input tax credit on thistransaction. .

APPUCATION OF ELECTION

This election applies only to a transaction where all or substantially all of the assets used in a commercial aetivily thet forms all or pallof a business carried on by the supplier are transferred to the recipient.

....,~". .:,~.:

"business" includes a profession. caJHng, trade. manufacture or undertaking of any kind whatever. whether or not the'aetIvily orundertaking is engaged in for profit, and any aetivily engaged in on a regular or contlnuous basis thet involves the supplyof property by way of lease. licence or similar arrangement. but does not include an office or employment.

"commercial ae:tivily" means:(a) any business carried on by a person,(b) any adventure or concern of a person in the nature of trade. and(c) any acttvily engaged in by a person that involves the supply of real properly or 01 a right or interest in respect 01 real property

by that person,BUT DOES NOT INCLUDE:(d) anyaclivily engaged in by a person to the extent that it involves the making 01 an exempt supply by the person,(e) any aclivily engaged in by ." individual without a rlllllOllllble expectali:lll 01 prolil, or(f ) the pelforrnanc:e of any duly or lICtivily In reIa1ion to an office or ert1pIotment.

"person" means an indMdual.parfIleIs/lip, corporation. trust or estate. or a bodY'that is a sociaty. union. club. association•.cornrniIIsioII or alher.Olgll1izallan 01 any kind. ' ',.

..:-=:..... " ..' .. ~...:. .. .~:- " .: : .:.:~ ~;,1.:' .

"property" means any property. whether real or P8fSOI1aI, movable or immovable, tangible or intangible. corporeal or incorporeal, andincludes a right or interest 01 any kind, a share and a choIe in action. but does not include money.

"registrant" means a person who is registered. or who is required to apply to be registered.

"substantially air means at Ieaat 90 per cent.

ADIIlNISTRATION

This form is prescribed by the Mlnisfer 01 National Rewnue under the Excise Till Act. The JnslrucIklns conIaln general informationand are provided for conveniellC8 and guidance in applying the Excise Till Act and regulations; The person uslnli this form shouldrefer to the legislation. wrillI and/or telephone their local Excise office If more inlormation is required.

The compIeIed'etec:tion form muet lICCOIIIIl&"Y the return lor the supplier'1 flIPOlllng period in whIc:h the supplyil ri.de. "," .

\j

Canadian Goods & Services Tax Reports ~90-400