Principal Issues:
1) Can a partnership that is a member of a partnership elect under subsection 97(2)?
2) Do the interest free loans and the agreement to pay interest on the debt instrument cause any member of the partnership to be a limited partner or a specified member?
3) Are the partnerships a "tax shelter" as per section 237.1?
4) Is the debt instrument "foreign property" to specified pension funds?
5) Will subsection 103(1) apply to redetermine the allocation of partnership income?
6) Will subparagraphs 53(1)(e)(i) and 53(2)(c)(i) be applied so as to avoid double taxation?
7) Will subsection 85(1) and 88(1) be available so as to have all assets held in the entity with the latter year end?
8) Will GAAR apply to recharacterize any of these rulings?
Position:
1) Yes.
2) No.
3) No, provided that no representations are made.
4) Not in this fact situation.
5) Not in this fact situation.
6) Yes.
7) Yes.
8) No.
Reasons: