Record retention requirements (ITA s. 230)

A seller handing over the books and a buyer keeping them both meet this rule. The six years is the Act’s general period, subject to prescribed periods and to the exceptions in the section. See what records to keep after selling.

Exceptions in the section

• If a return was not filed when required, records are kept until six years after the return is filed (s. 230(5))
• If a notice of objection is served or an appeal is under way, records are kept until that process ends (s. 230(6))
• Electronic records must be kept in an electronically readable format (s. 230(4.1)), unless the Minister exempts the person (s. 230(4.2))
• The Minister can demand a longer period (s. 230(7)) or give written permission to dispose of records earlier (s. 230(8))

What the CRA adds

The CRA says that when a non-incorporated business ends, it keeps its records for six years from the end of the tax year in which it ended, and that a dissolved corporation has its own period. Ask the seller which records pass to the buyer and which copies the seller keeps. See the access to books and records covenant.