Burlington Resources - Tax Court accepts that it is "legitimate to ask" whether an NSULC should pay for a parent guarantee

The Minister challenged, under s. 247, the deduction by an NSULC of guarantee fees paid to its US parent (BRI).  In response to a challenge of the Minister's relevant pleading, Hogan J stated that "it is legitimate to ask whether an arm's length person standing in the appellant's shoes would have been willing to pay the guarantee fees ... knowing that BRI was potentially responsible for the appellant's liabilities even without the guarantee."

Scott Armstrong.  Summary of Burlington Resources Finance Company v. The Queen, 2013 TCC 231, under s. 247(2).