CRA declines to provide guidance on determining the monthly FMV of GP services to an ILP

ETA ss. 272.1(8) and (3) effectively indicate that management or administrative services rendered by a general partner to an investment limited partnership (ILP) are taxable based on the fair market value of such services rendered in each month (or other billing period). CRA did not provide specific guidance on how such FMV was to determined, and stated:

The CRA recognizes that there are various methods that may be used and the appropriateness of any valuation methodology used in a particular case is a matter of valuation principles and practice. …

[T]he FMV of a supply of a management or administrative service may not necessarily always correspond to the consideration paid for such a service. …

General partners can use whichever method they would like to determine FMV. However … [t]he CRA is under no obligation to accept the value used by the general partner if it is determined to be over or under valued but it will consider the general partner’s FMV determination … .

Neal Armstrong. Summary of 28 February 2019 CBA Roundtable, Q.15 under ETA s. 272.1(3)(b).