15 November 2000 External T.I. 2000-0033735 - DOES ASSOCIATION INCLUDE A PARTNERSHIP

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

Whether payment to a resident of Canada on account of interest on an amount received and held as a rental deposit by a partnership must be reported on a form T5 information slip.

Position TAKEN:

Yes

Reasons FOR POSITION TAKEN:

The word "association" as it appears in Regulation 201(1)(b)(ii) of the Act ("a corporation, association, organization or institution") is wide enough to include a partnership such that there is a requirement to file an information return.

XXXXXXXXXX 2000-003373
P. Diguer
Attention: XXXXXXXXXX

November 15, 2000

Dear Sir:

Re: Subsection 201(1) of the Income Tax Regulations

This is in reply to your letter dated June 8, 1999, in which you requested our views with respect to reporting on a form T5 information slip the interest either accruing to or paid to a tenant on the amount of a rent deposit held by a partnership/landlord.

It is your view that there is no requirement in section 201 of the Income Tax Regulations (the "Regulations") for the partnership to report on form T5 information slip the interest paid or accrued on the rent deposit.

Our comments

Regulation 201(1) provides in part:

201(1) Every person who makes a payment to a resident of Canada as or on account of
...
b) interest ...
ii) in respect of
(A) money on loan to,
(B) money on deposit with, or
(C) property of any kind deposited or placed with,
a corporation, association, organization or institution,
...
shall make an information return in prescribed form.

Thus an information return (T5) is required to be filed to the extent that the payment is described in any of subparagraphs 201(1)(b)(i) to (v) of the Regulations.

In our view, the word "association" as it appears in subparagraph 201(1)(b)(ii) of the Regulations includes a partnership.

The preamble to Regulation 201(1) requires the completion of the information return by a "person". As stated as stated in paragraph 1 of IT-90, a partnership is not a person nor is it deemed to be a person for the purposes of Regulation 201(1) of the Act.

As the preamble to Regulation 201(1) applies where a "... person ... makes a payment" it appears that the provision would require the making of the information return by each person that is a member of the partnership to the extent of that person's share of the payment. However, the Agency will accept, for administrative purposes, the making of the information return by the partnership.

Regulation 201(4) of the Act provides for the making of the information return at the partnership level.

We trust our comments will be of assistance to you.

Yours truly,

for Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Legislation Branch

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