My accountant mentioned a section 167 election for selling my business — what is it?

A section 167 election is a joint election available under the Excise Tax Act that lets a purchaser and vendor treat the sale of a business, or part of a business, as a sale without GST/HST applying to the transferred assets, provided the purchaser is acquiring ownership, possession, or use of all or substantially all of the property needed to carry on that business, or that part of it, as a business, and other conditions in the election are met.

Without the election, a sale of business assets would generally attract HST on the taxable assets included in the deal, which the purchaser would then have to fund up front and recover later through input tax credits, assuming they're eligible to claim them. The election avoids that cash-flow burden entirely for qualifying transactions by treating no tax as having been charged or paid on the supply.

Because eligibility depends on the specific assets being transferred, the purchaser generally needing to be a GST/HST registrant, and the election having to be properly completed and kept on file, rather than filed with the CRA at the time of sale, but available if requested, this is something your accountant and lawyer should confirm applies to your specific transaction and paperwork before closing, not assume automatically.