2008 Ruling 2008-0273481R3 - Partnership Reorg -Personal Service Business

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: Where a partner of a professional partnership creates a professional corporation through which professional services will be provided to the partnership, will the corporation be eligible for the small business deduction?

Position: Question of fact. Generally, yes, if certain conditions are met.

Reasons: Reading of relevant legislation and consistent with other rulings.

XXXXXXXXXX 								2008-027348

XXXXXXXXXX , 2008

Dear XXXXXXXXXX :

Re: XXXXXXXXXX ("Partnership")
Tax Account XXXXXXXXXX
XXXXXXXXXX ("Named Partners")
Advance Income Tax Ruling

This is in reply to your letter dated XXXXXXXXXX , in which you requested an advance income tax ruling on behalf of the Partnership and its Named Partners. We also acknowledge the additional information provided to us in your numerous electronic mail transmissions, letters, and during our telephone conversations (XXXXXXXXXX ).

We understand that, to the best of your knowledge, and that of the taxpayers involved, none of the issues described herein is:

(i) in an earlier return of the Partnership, any of the Partners or a related person;
(ii) being considered by a Tax Services Office or Taxation Centre in connection with a previously filed return of the Partnership, any of the Partners or a related person;
(iii) the subject of any notice of objection;
(iv) before the courts or, if a judgment has been issued, the time limit for appeal has not expired; or
(v) the subject of a previously issued ruling.

Our understanding of the facts, proposed transactions and the purpose of the proposed transactions is as follows:

DEFINITIONS

In this letter, unless otherwise expressly stated:

(a) "Act" means the Income Tax Act (Canada), R.S.C. 1985 (5th Supplement), c.1, as amended to the date hereof;

(b) "Administrative Responsibilities" do not include any of the Professional Services, but means all of the administrative responsibilities that are, and will continue to be, carried out by the Partners to carry on the Practice. They include, among other things: (i) promoting, and contributing to the growth of, the Practice, (ii) conducting management functions, (iii) educating Professionals and staff, (iv) enhancing the Partnership's profile, (v) recruitment and (vi) referrals;

(c) "associated" when used in connection with a Professional Corporation or a Contracting Company has the meaning described in subsection 256(1) of the Act;

(d) "Canadian-controlled private corporation" has the meaning assigned by subsection 125(7) of the Act;

(e) "Contracting Company" means each Professional Corporation that will be incorporated as permitted under the laws of the Province (and as described in Paragraph 11) for the benefit of an existing Principal and that will be engaged by the Partnership to provide Professional Services and, collectively, they are referred to as "Contracting Companies";

(f) "Corporations Act" means the XXXXXXXXXX

(g) "CRA" means the Canada Revenue Agency;

(h) "Electing Partners" means those Partners who elect to provide Professional Services to the Partnership through a Contracting Company, as more particularly described in Paragraphs 9 and 12. Presently, it is proposed that all Partners, except XXXXXXXXXX , will be Electing Partners;

(i) "Fee" means the fair market value fee to be paid by the Partnership to a particular Contracting Company in return for Professional Services rendered by the Contracting Company, as described in Paragraph 14;

(j) "Fiscal Year" means the fiscal year of the Partnership, being XXXXXXXXXX ;

(k) "Non Electing Partner" means a Partner who does not elect to provide Professional Services to the Partnership through a Contracting Company. They will continue to provide such Professional Services as a Partner of the Partnership. Presently, it is proposed that XXXXXXXXXX will each be a Non Electing Partner;

(l) "Paragraph" refers to a numbered paragraph in this letter;

(m) "Partners" means the Professionals and Professional Corporations who are currently partners of the Partnership. More particularly, the Partners are as listed in your XXXXXXXXXX , letter to us and are XXXXXXXXXX

(n) "Partnership" means the partnership, which currently carries on the Practice under the firm name and style of "XXXXXXXXXX ". It is a registered partnership pursuant to the laws of the Province;

(o) "Partnership Agreement" means the partnership agreement entered into among the Partners, as more particularly described in Paragraph 5;

(p) "personal services business" has the meaning assigned by subsection 125(7) of the Act;

(q) "Practice" means the services currently provided by the Partnership being: (i) the provision of Professional Services at various locations (including XXXXXXXXXX ) within the Province; and (ii) the Administrative Responsibilities conducted by the Partners that are necessary to carry on the professional practice;

(r) "Principals" means (i) those individuals who are Partners as of the date hereof; and (ii) those individuals who are controlling shareholders of Professional Corporations that are Partners as of the date hereof, and "Principal" means any one of them;

(s) "Professional" means an individual XXXXXXXXXX ;

(t) "Professional Corporation" means a corporation that is incorporated under the laws of the Province, or under the Canada Corporations Act;

(u) "Professional Services" means the professional services of XXXXXXXXXX ;

(v) "Province" means the Province of XXXXXXXXXX ;

(w) "related persons" has the meaning assigned by subsection 251(2) of the Act;

(x) "Services Agreement" means the services agreement to be entered into between the Partnership and each Contracting Company, as more particularly described in Paragraph 14;

(y) "specified partnership income" has the meaning assigned by subsection 125(7) of the Act;

(z) "taxable Canadian corporation" has the meaning assigned by subsection 89(1) of the Act.

FACTS

1. The Partnership was originally formed on XXXXXXXXXX . The Partnership carries on the Practice as a general partnership and has XXXXXXXXXX Partners. Of the current Partners, XXXXXXXXXX are individuals who are Professionals and XXXXXXXXXX are Professional Corporations in which a Professional is the sole shareholder, owning voting shares.

2. The Practice is carried on by the Partners in the Province at XXXXXXXXXX . In addition to the Partners, there are a number of associate XXXXXXXXXX professionals who are not Partners but who are employed by the Partnership. There are also a number of XXXXXXXXXX , support staff and management staff employed by the Partnership to undertake some of the various technical, administrative and management tasks required in the operation of the Practice.

3. Currently, the Partners provide all of their services (i.e., Professional Services and Administrative Responsibilities) to the Partnership's clients, on behalf of the Partnership. In the case of Partners that are Professional Corporations, each respective Principal, acting as an employee of their Professional Corporation, performs the relevant Professional Services on behalf of the Partnership.

4. The Partnership's identification number is XXXXXXXXXX . The Partnership and the Partners file information and tax returns, as appropriate, with the XXXXXXXXXX Taxation Centre, and deal with the XXXXXXXXXX Tax Services Office. The Partnership's main office is located at XXXXXXXXXX and its main place of business is at XXXXXXXXXX , in the Province.

5. The Partnership is governed by a written Partnership Agreement that was originally signed on XXXXXXXXXX and has since been amended or restated on numerous occasions including most recently on XXXXXXXXXX . The key terms of the Partnership Agreement are as follows:

(i) each Partner maintains a capital account with the Partnership to which is credited the
amount of all capital contributions and the amount of all income allocated to the Partner
and to which is debited the amount of any loss allocated to the Partner and any
withdrawals made by the Partner;

(ii) the net profits of the Partnership are distributed equally between the full members of
the Partnership (see Paragraph 6 for exceptions);

(iii) most matters require approval by a simple majority of Partners;

(iv) day-to-day management of the affairs of the Partnership is carried out by a
business manager;

(v) one Partner is appointed to assume the role of XXXXXXXXXX and is responsible for the administration and organization of the XXXXXXXXXX staff for all phases of XXXXXXXXXX and to ensure delivery of appropriate XXXXXXXXXX services. Any stipend received by the XXXXXXXXXX for the carrying out of these responsibilities is viewed as personal taxable income and not Partnership income. There is also a Managing Partner who receives an income allocation from the Partnership for performing his administrative duties; and

(vi) upon leaving the Partnership a Partner is entitled to be paid certain amounts, including the balance in his, her or its capital account and his, her or its share of net profits for the year in which the withdrawal occurs.

6. Each Partner currently works approximately the same number of hours, except for a few who work less hours and are only entitled to XXXXXXXXXX % of a full share of the net profits of the Partnership. The different tasks (which generate different fees for the Partnership) are rotated amongst the Partners so that each Partner performs each different task approximately the same number of times as the other Partners. Consequently, the revenues that each full-time Partner generates for the Partnership are approximately equal.

7. All of the Partners are residents of Canada. None of the Partners are related persons. All Partners that are corporations are Canadian-controlled private corporations and taxable Canadian corporations.

PROPOSED TRANSACTIONS

8. The Partnership Agreement will be amended to allow Partners to elect to provide their Professional Services to the Partnership through Contracting Companies engaged by the Partnership to provide such services as independent contractors. To implement this change, the Partnership Agreement will differentiate between the two functions that each Partner performs, that being Professional Services and Administrative Responsibilities. In addition, the Partnership Agreement will be amended to provide that a Partner who incorporates a Contracting Company will no longer provide Professional Services to the Partnership in his or her capacity as a Partner.

9. Each Partner shall have the right to elect, by notice in writing to the Partnership, to be delivered not less than XXXXXXXXXX days prior to the effective date of the notice, to provide all of his or her Professional Services through a Contracting Company controlled by that Partner (or where that Partner is currently a Professional Corporation, through a second Professional Corporation that will be a Contracting Company controlled directly by the Principal of the Partner).

10. Upon receipt of the notice provided for in Paragraph 9, the Partnership will enter into a written Services Agreement with the Contracting Company for the provision of Professional Services. The terms of each Services Agreement are more particularly described in Paragraph 14 below. The Partnership Agreement will also be amended to prohibit Administrative Responsibilities from being conducted by anyone other than the Partners themselves. All Partners will continue in their capacity as Partners to conduct Administrative Responsibilities for the Partnership.

11. Each Electing Partner, or, in the case of Electing Partners that are Professional Corporations, each Principal of an Electing Partner, will incorporate a Contracting Company under the laws of the Province or Canada. All Contracting Companies will be licensed to carry on the practice of XXXXXXXXXX in the Province (as described in Paragraph 15). None of the Contracting Companies will be related persons. None of the Contracting Companies will be existing Professional Corporations that are Partners. Each Contracting Company will be a taxable Canadian corporation and a Canadian-controlled private corporation. Where an Electing Partner is a Professional Corporation, the Contracting Company formed by the Electing Partner's Principal will be related to and associated with the Electing Partner.

12. Consequential amendments to the Partnership Agreement will provide that the calculation of an Electing Partner's share of the Partnership's profits for a year will be dependent solely on that Partner's Administrative Responsibilities conducted for the Partnership. More specifically, the calculation of an Electing Partner's share of the Partnership's profits will not depend on the Professional Services provided by the Electing Partner's Contracting Company (or, where the Electing Partner is a Professional Corporation, by the Contracting Company formed by the Electing Partner's Principal), or on the time spent on Professional activities by the relevant Principal in his or her role as an employee of their Contracting Company. A Non Electing Partner's share of profits of the Partnership will be based on the Non Electing Partner's Administrative Responsibilities conducted for the Partnership and the amount of Professional Services provided to the Partnership by the Non Electing Partner.

13. The Partnership Agreement will also be amended to prohibit the transfer, conveyance, or issuance of an interest in the Partnership to any Contracting Company.

14. The Partnership will enter into a written Services Agreement with each Electing Partner's Contracting Company or, in the case of Electing Partners that are Professional Corporations, with the Contracting Company of each Principal of an Electing Partner. The Services Agreement will only engage those Contracting Companies to provide Professional Services to the Partnership. Administrative Responsibilities for the Partnership will continue to be conducted by the Partners and not by the Contracting Companies. The Services Agreement will, among other things, provide for the following:

(i) the Contracting Company will provide Professional Services to the Partnership in return for a Fee. The amount of the Fee will be tied to the level of work performed by the Contracting Company, and not to the success in collecting billings in respect of that work. The amount of the Fee to be paid by the Partnership to a Contracting Company will be equal to the fair market value of the Professional Services that the Contracting Company provides, after considering any supplies, personnel, facilities and equipment provided to the Contracting Company by the Partnership as described in subparagraph (viii), below.;

(ii) a "Practice Profile" will be part of the Services Agreement. The Practice Profile will express the number of days that a Contracting Company agrees to provide each of the Professional Services with the fair market value rate for each type of service. If the amount of Professional Services provided is less than, or more than, as agreed to, the amount of the Fee will be reduced or increased accordingly to reflect a fair market value Fee for the actual Professional Services provided;

(iii) there will be a minimum number of work days per year that the Contracting
Company agrees to provide services to the Partnership;

(iv) the initial term of each Services Agreement will terminate at the end of the first calendar year. Thereafter, Services Agreements will be automatically and continuously renewed for one-year terms, with any mutually agreed upon amendments, subject to the termination provisions;

(v) the parties will jointly determine an estimate of the Fee payable to the

Contracting Company for the Fiscal Year. Based on the estimate, the Partnership will pay the Contracting Company XXXXXXXXXX installments on account of the estimated Fee payable. The Partnership may, from time to time, make additional payments to the Contracting Company in respect of a Fiscal Year as may be necessary to top up the installments to the amount of Fee then estimated to be payable. Any such top up payments would be based on the fair market value of the Professional Services actually provided by the particular Contracting Company. At the end of the Fiscal Year, the parties will conduct a final reconciliation, if necessary;

(vi) the Contracting Company will invoice the Partnership from time to time for
Professional Services rendered under the Services Agreement;

(vii) all payments from third parties received by the Partnership in respect of Professional Services provided by the Contracting Companies on behalf of the Partnership will be for the benefit of the Partnership and if any amounts are received by a Contracting Company for work performed for the Partnership, they will be remitted to the Partnership;

(viii) the Partnership will provide the Contracting Company with certain supplies, personnel, facilities and equipment that are required for the provision of Professional Services under the Services Agreement. The amount of the Fee will be reduced by the fair market value amount attributable for the use of these items by the Contracting Company. In addition, Contracting Companies will be responsible for the following expenses:

i. professional membership fees and insurance;

ii. continuing education (in particular the expense of professional development and courses for the respective Principal);

iii. transportation;

iv. communication;

v. maintaining the professional standards set by the XXXXXXXXXX and by the Partnership (to the extent necessary for the Contracting Company to fulfill the Services Agreement);

vi. expenditures on personal practice preferences of the Contracting Company;

vii. entertainment expenses connected to the business of the Contracting Company; and

viii. travel expenses including car, accommodation and meal expenses.

The partnership agreement will be amended accordingly;

(ix) in the event the Contracting Company, or an employee of the Contracting Company, commits an offence that would be considered to be professional misconduct, or if the Contracting Company fails to comply with the terms of the Services Agreement (either of which will constitute a "Default"), the Partnership may suspend the terms of the Services Agreement. The Contracting Company will be provided a period of time (the "Suspension Period") in which to rectify the Default to the satisfaction of the Partnership. If the Default has been rectified prior to the end of the Suspension Period, the Partnership will reinstate the Services Agreement. If the Default has not been rectified at the end of the Suspension Period, the Partnership may terminate the Services Agreement;

(x) on the request of the Contracting Company, the Partnership may, in its sole discretion and in accordance with its internal policies, suspend a Services Agreement for a period of XXXXXXXXXX months (which may in some cases be extended to XXXXXXXXXX months). This could occur, for example, where the Principal of the Contracting Company is going on an extended vacation, or has a personal matter that needs attention. No amounts will be paid to the Contracting Company during the suspended period. If, following a suspended period, the Contracting Company once again agrees to provide Professional Services to the Partnership, the Services Agreement will be reinstated until the end of the term;

(xi) the Contracting Company or the Partnership may terminate the Services Agreement at any time by providing notice to the other party of not less than XXXXXXXXXX months. If the Contracting Company or the Partnership materially breaches a term of the Services Agreement, the other party may, in its sole discretion, terminate the Services Agreement without notice;

(xii) in the event that a Principal suffers a physical or mental disability such that their Contracting Company is unable to provide the services required of it under the Services Agreement, then the Contracting Company may terminate the Services Agreement or suspend it for up to XXXXXXXXXX months. If the Contracting Company fails to terminate or suspend the Services Agreement, the Partnership will have the right to terminate the Services Agreement or suspend it for up to XXXXXXXXXX months;

(xiii) in the event of:

i. the death or mental incapacity of a Principal; or

ii. the bankruptcy of the Contracting Company or its Principal;

the Partnership shall have the right to immediately terminate the Services Agreement, these terms to be consistent with the terms imposed on any professional corporation providing professional services to the Partnership as an independent contractor;

(xiv) in the event that a Contracting Company cannot provide its services on a particular day to the Partnership under the Services Agreement, the Contracting Company may either:

i. find a replacement person to provide such services to the Partnership on its behalf; or

ii. subcontract with another person to provide services to the Partnership on its behalf as the parties may mutually agree. In either case, the person selected by the Contracting Company must be a qualified and licensed individual or an appropriately licensed company employing a qualified individual.

Both the Partnership and the Contracting Company shall not unreasonably withhold their consent regarding which of the above methods is chosen. If the parties cannot agree as to which method is to be chosen, the Contracting Company has the final right to decide on the method and, whether or not the Partnership chooses to accept the subcontractor or replacement, the Contracting Company shall be held to have performed the Services Agreement.

Where the Contracting Company finds a replacement person to provide the relevant services to the Partnership, the replacement would be paid directly by the Partnership a fair market value fee for services and the amount of the Fee paid by the Partnership to the Contracting Company would be reduced accordingly;

(xv) as long as a Contracting Company fully discharges its responsibilities under the Services Agreement, the Contracting Company will not be restricted from providing services to other persons or otherwise prohibited from competing with the Partnership. Consequential amendments to the Partnership Agreement will be made so that Electing Partners, who provide Professional Services through a Contracting Company, are not restricted from competing with the Partnership in respect of those Professional Services.

15. Each Contracting Company will obtain a permit from the XXXXXXXXXX prior to entering into a Services Agreement with the Partnership. The permit will authorize the Contracting Company to practice XXXXXXXXXX in the Province.

16. The voting shares of each Contracting Company will be owned by the Principal that incorporated the Contracting Company. The issued non-voting shares of each Contracting Company, if any, will be owned directly by the Principal's family members. For the purpose of this ruling request, "family" means individuals connected by blood relationship, marriage, common-law partnership or adoption, as those terms are defined in subsection 251(6) of the Act. All persons legally or beneficially owning shares of a Contracting Company will be residents of Canada.

17. The sole director and President of each Contracting Company will be the Principal that incorporated the Contracting Company.

18. No Principal will be an employee, officer, director or shareholder, either legally or beneficially, of more than one Contracting Company. Family members of a particular Partner may only be shareholders of the Contracting Company in which that Partner owns shares, unless that family member is a member of the Partnership, in which case he or she may be a shareholder of his or her own Contracting Company.

19. Each Principal will be an employee of his or her Contracting Company and will provide Professional Services for the benefit of the Contracting Company pursuant to the terms of the Services Agreement with the Partnership. A Principal who provides services for the benefit of his or her Contracting Company will be entitled to receive a salary from his or her Contracting Company. The employment relationship between the Principal and his or her Contracting Company will be evidenced by a written employment agreement.

PURPOSE OF PROPOSED TRANSACTIONS

20. The primary objective of the Proposed Transactions is to allow the Partners to use Professional Corporations to earn professional income as independent contractors with minimal disruption to the business arrangements of the Partnership. This provides a number of advantages, including:

(i) providing each Partner with an increased level of control over his or her
participation in the Practice through individual management of personal practice
preferences;

(ii) permitting each Partner to have control over expenditures where such
expenditures may not be in the interest of all participants in the Practice; and

(iii) providing Partners with more control over their estate and financial planning.

The benefit of these transactions to the Partnership is that they enhance the Partnership's ability to retain and recruit Professionals.

RULINGS

Provided that

(a) the preceding statements constitute a complete and accurate disclosure of all of the relevant facts, proposed transactions and the purposes of the proposed transactions,

(b) the proposed transactions are completed in the manner described above, and

(c) there are no other transactions which may be relevant to the rulings requested,

our rulings are as follows:

A. The execution and implementation of the proposed transactions described above, in and of themselves, will not constitute a disposition of part or all of an interest in the Partnership by any Partner for purposes of the Act.

B. Provided the amount of the Partnership's income allocated to an Electing Partner is otherwise reasonable, having regard to all the relevant circumstances, the Electing Partner's share of the Partnership's income will not be altered, pursuant to subsection 103(1) of the Act, solely as a result of the Electing Partner choosing, pursuant to amendments to the Partnership Agreement, to provide all of its Professional Services to the Partnership through a Contracting Company, all as described above in the proposed transactions.

C. The execution and implementation of the proposed transactions described above, will not, in and of themselves, create a non-arm's length relationship between an Electing Partner and the other Partners with respect to sharing the Partnership's income for income tax purposes.

D. Subject to sections 18 and 67 of the Act, the Fee payable by the Partnership to a particular Contracting Company pursuant to a Services Agreement, as described in Paragraph 14, will be deductible by the Partnership in its determination of the Partnership's income for purposes of subsection 96(1) of the Act.

E. The proposed transactions undertaken as described above, and in particular the Fee payments described in Paragraph 14, will not, in and of themselves, cause subsections 56(2), 56(4) or 246(1) of the Act to apply so as to cause an amount of the Fees received by a particular Contracting Company under a Services Agreement to be taxed as income in the hands of an Electing Partner.

F. A Contracting Company that supplies Professional Services to the Partnership, as described in Paragraph 14, will not be considered to be carrying on a personal services business. This is only so provided the Principal of that Contracting Company would not, if the particular Contracting Company did not exist, reasonably be regarded as an officer or employee of the Partnership in respect of those services.

G. Provided a particular Contracting Company was not a member of any partnership in the relevant year, the Fee income earned by the particular Contracting Company pursuant to a Services Agreement, as described in Paragraph 14, will not be specified partnership income.

H. Implementation of the proposed transactions described above, will not, in and of themselves, result in the application of the provisions of subsection 245(2) of the Act to re-determine the tax consequences confirmed in the rulings given above.

These rulings are given subject to the general limitations and qualifications set forth in Information Circular 70-6R5, issued by the CRA on May 17, 2002, and are binding on the CRA provided the proposed transactions are entered into on or before XXXXXXXXXX . These rulings are based on the Act in its present form and do not take into account the effect of any proposed amendments to the Act which, if enacted, could have an effect on the rulings provided herein.

Except as expressly stated, our rulings do not imply acceptance, approval or confirmation of any income tax implications of the facts or proposed transactions. In particular, nothing in this letter should be interpreted as confirming, either expressly or implicitly that the CRA has agreed to or accepted the reasonableness or fair market value of any fees or expenditures referred to in this letter.

ADDITIONAL COMMENTS

Whether or not a Principal who is providing his or her Professional Services to the Partnership through a Contracting Company would, but for the existence of that Contracting Company, be an employee of the Partnership, or an independent contractor who has entered into a contract for services with the Partnership, is a question of fact that can only be determined after a review of all of the relevant facts, including the actual agreements entered into between the Contracting Company and the Partnership, and between the Contracting Company and the Principal. This review and determination is the responsibility of the Principal's local tax services office.

The attribution rules in sections 74.1 to 74.4 of the Act apply in situations where property is transferred or lent, directly or indirectly, to a spouse or child. These rules may apply to any income received by a spouse, or a child who has not attained the age of 18 years before the end of a particular taxation year. Whether or not these rules will apply in respect of the ownership of any shares of a Contracting Company, as described in Paragraph 16, is a question of fact that can only be determined at the time that the shares are issued or property is lent or transferred to such a shareholder. Furthermore, subsection 56(2) of the Act may apply to any amounts paid by a Contracting Company to a family member of the Principal who incorporated the Contracting Company. Also, section 120.4 of the Act may apply with respect to taxable dividends from a Contracting Company received in a taxation year by a family member of a Principal who has not attained the age of 17 years before that year. At this time we do not have sufficient information to make any such determinations.

OPINION

The application of subsection 256(2.1) of the Act is determined on a year-to-year basis. We are therefore unable to rule that this provision will never apply to the Contracting Companies. In general, where a particular function of a professional partnership that was previously carried on by the partnership is subsequently carried on by a partner's professional corporation, and no longer in partnership, for bona fide reasons other than income tax, this fact, in and of itself, would generally not cause subsection 256(2.1) of the Act to be applicable. The reasons for the separate existence of two or more professional corporations or the reasons for a change in the functions performed directly by the partners of the professional partnership is a question of fact that can only be determined on a case-by-case basis. However, based on the facts and proposed transactions described herein, it is our view that the incorporation of the Contracting Companies to provide the Professional Services to the Partnership will not, in and of itself, cause subsection 256(2.1) of the Act to be applicable to the Contracting Companies. We note that, as stated in Paragraph 11, where an Electing Partner is a Professional Corporation, the Contracting Company formed by the Electing Partner's Principal will be related to and associated with the Electing Partner.

In accordance with paragraph 22 of Information Circular 70-6R5, the comments in the immediately preceding paragraph are only an expression of opinion, and as such should not be construed as an advance income tax ruling, nor are they binding on the CRA.

Yours truly,

XXXXXXXXXX
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch