Gst44 - section 167 election

Lawyer (HST registrant) sells business (assets & goodwill) to another lawyer (not HST registrant) - January 2017.

Purchasing lawyer attempted to register for HST online in January, however, to his surprise later discovered he didn’t register for HST rather got a business number with CRA.

Would best course of action for buying lawyer be to backdate HST registration to January (when the assets & goodwill were acquired) and file the gst44 election by date HST report is due - June 15 2018?

Or should buying agent pay the HST to the selling lawyer?

Promissory note is how the purchase was made.


I remember things changed a while ago with regard to the online registering of business numbers. In typical CRA fashion, HST registration is now a 2 step process. First you apply for a Business Number… then you add specific program accounts as a separate procedure. Prior to that it was all part of the same procedure.

I suppose it would come as a bit of a surprise some 16 months later when you realize you aren’t registered for HST. Unlike the good old days, the CRA will only backdate a registration up to 30 days unless you can prove you were required to be registered prior to that. If the purchasing lawyer can provide the CRA with some of his sales invoices that date back to January of 2017 showing that he started collecting HST from clients back in January of 2017 then they will back date the registration to the date of his first invoice that shows HST was collected. The effective date might still be later than the date of the purchase of the law practice, which may not help with the GST44 election.

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Had a case recently where client decided to save a few bucks and did registration himself, omitting GST registration, of course. I phoned up CRA Business Registrations, explained the scenario, and they were willing in this case to backdate GST registration to Business # registration date.

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