2001 Income Tax Severed Letter 2001-0116311 - 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: minor changes

Position: no impact on rulings

Reasons: minor changes

XXXXXXXXXX 2001-011631

XXXXXXXXXX, 2001

Dear XXXXXXXXXX:

Re: XXXXXXXXXX (the "Offering Partnership")
XXXXXXXXXX
(the "Operating Partnership")
Those persons who from time to time become limited partners
in the Offering Partnership
Supplementary Advance Income Tax Ruling

This is in reply to your letter of XXXXXXXXXX, and is supplemental to our advance income tax ruling number 2001-008655 dated XXXXXXXXXX, 2001 (the "Ruling").

As a result of your letter, the following changes will be made to the Ruling:

1. In the list of defined terms, add as definition (bbb) after (bb) and before (cc) the following:

"(bbb) "Initial Limited Partner of the Operating Partnership" means initially, XXXXXXXXXX, and subsequently, a corporation resident in Canada, all the shares of the capital stock of which are owned by XXXXXXXXXX;"

2. In the list of defined terms, delete definition (ll) and insert the following in its place:

"(ll) "Operating General Partner" means XXXXXXXXXX, the general partner of Operating Partnership. All the issued shares in the capital of XXXXXXXXXX are owned by XXXXXXXXXX, all of whom are individuals who are residents of Canada. Operating General Partner is a taxable Canadian corporation incorporated under the laws of XXXXXXXXXX. Subsequently, shares in the capital of XXXXXXXXXX may be owned by Company A and Company B, and/or certain directors, officers or affiliates thereof;"

3. In the second sentence in paragraph 10, delete the words "for an annual fee".

4. In the second sentence in paragraph 27, delete the words "all of which will be owned by the Offering Partnership" and insert the following in their place:

"all of which initially will be owned by the Initial Limited Partner of the Operating Partnership and subsequently, when the public offering of Class A Units to the public is completed as described in paragraph 15 above, the interest of the Initial Limited Partner of the Operating Partnership will be repurchased for the amount paid on the subscription therefor and the Offering Partnership will acquire OP Units from the Operating Partnership as described in paragraph 30 below."

5. At the end of the second sentence in paragraph 29, and before the period, insert the following:

"in consideration for an annual fee of $XXXXXXXXXX (subject to annual increases based on the increase, if any, in the Consumer Price Index) together with reimbursement for any expenditures made on behalf of the Operating Partnership."

6. At the end of the first paragraph in paragraph 32, insert the following:

"XXXXXXXXXX."

7. Delete paragraph 34, and insert the following in its place:

"XXXXXXXXXX."

Canco #3 will agree to release its key senior employees from their employment contracts so that they may be hired by Operating Partnership. The services of these key senior employees of Canco #3 will be essential to the successful operation of the business of the Operating Partnership. As an inducement to allow the services of these employees to be made available to the Operating Partnership, the Operating Partnership will agree to pay to Canco #3 a fee (the "Incentive Fee") in the amount of

$XXXXXXXXXX."

8. In the third bullet in paragraph 36, insert the following words between the words "that" and "during" in the fourth line:

", commencing on the earlier of the date of repayment of the Purchase Note described in paragraph 32 above or XXXXXXXXXX,"

Notwithstanding the above change, we confirm that the Ruling will continue to be binding on the Canada Customs and Revenue Agency in the manner described therein, provided the offering by the Offering Partnership of its Class A Units is completed on or before XXXXXXXXXX.

If we can be of any further assistance, please contact the writer.

Yours truly,

XXXXXXXXXX
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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