CRA elaborates on its grandfathering of LLPs and LLLPs

At the 2017 IFA Roundtable, CRA announced that it will allow Delaware & Florida LLPs and LLLPs formed before April 26, 2017 to continue filing as partnerships, provided that three requirements are satisfied. CRA has now elaborated on this grandfathering relief.

Respecting a requirement that the LLP/LLLP not take positions that are inconsistent with corporate treatment, CRA will accept the filing of a T2 return or of a T1134 or T106 (as well as obtaining a Business Number) based on the announcement at the 2016 IFA Conference that the LLPs/LLLPs were corporations.

Respecting a requirement that there is no significant change in its membership or activities, this will not be considered to occur by virtue of a transfer of membership between parties not dealing at arm’s length or the issuance of additional memberships to them.

The fact that an LLC was converted before April 26, 2017 to a Delaware & Florida LLP or LLLP would not prevent it from accessing the grandfathering relief.

The above relief will be applied to LLPs and LLLPs of other jurisdictions having similar (corporate) attributes where they were set up before April 26, 2017.

Neal Armstrong. Summary of 21 July 2017 Email of the CRA Delaware/Florida Working Group entitled “General answer for Delaware/Florida Working Group Submissions” under s. 96.