What final tax returns do I file after selling my business?

Sellers often treat closing as the end of the obligations. Several filings fall due afterwards, some on deadlines tied to the disposition rather than to the usual year end, and penalties attach to the ones that are missed.

Asset sale: a sequence of closing filings

The corporation reports the disposition in its return for the period in which it occurred, including any recapture of capital cost allowance and the gain or loss on each class of asset. Payroll accounts need final remittances and T4s covering employment to the closing date. GST/HST needs a final return. Each has its own deadline and they do not all coincide.

Do not close the accounts too early

This is the practical error. Closing a GST/HST or payroll account before the final return is filed and any refund received can complicate recovering money you are owed, and an input tax credit on closing-related professional fees is easy to lose this way. File first, then close.

Share sale: the corporation carries on

Nothing about the company’s filing obligations changes, because the company is not the thing that was sold. Its year end may or may not change depending on what the buyer does. The seller’s own personal filing is where the share disposition appears, including any capital gains exemption claim — which is a different return and a different deadline.

Keep the records after you have filed

Retention obligations survive the sale, and a reassessment can arrive years later for a period you no longer operate in. Agree with the buyer who holds which records and how you get access to them if you need to answer a query about your own period — a seller who hands over every box and keeps no copies has a problem waiting.