Opco pays a dividend in year One, but it doesn’t believe it has any GRIP at that time, and so no eligible dividend designation is made in respect of the dividend. The CRA later reassesses Opco, and one of the effects of the reassessment is to give Opco GRIP in year One. Opco contests the reassessment, but it is upheld, and more than three years have passed. Can Opco late-file an eligible dividend designation for the year One dividend now that Opco had GRIP at the time? The CRA has stated that Opco cannot late-file a designation outside the limitation period established by subsection 89(14.1). Moreover, the CRA will not accept a designation within the limitation period and hold it in abeyance pending the outcome of a dispute. Technical interpretation 2014-0541991E5 dated March 12, 2015, summarized in Daniel Gosselin, “Late-Filed Eligible Dividend Designations Subject to Strict Three-Year Window” (July 2015) 15:1 Tax for the Owner-Manager 4-5.
