19 November 1992 Income Tax Severed Letter 9231145 - Successor Rules - 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.

923114
John Chan
24(1) (613) 957-8975

Attention: 19(1)

November 19, 1992

Dear Sirs:

Re: Request for Technical Interpretation - Successor Rules in Section 66.7

This is reply to your letter of October 15, 1992 in which you pointed out that upon acquisition of control of a corporation which has an interest in a partnership, paragraphs 66.7(10)(c) and (j) of the Income Tax Act apply to the corporate partner and deems the Canadian resource properties of the partnership to have been acquired by the corporate partner from an original owner for purposes of the successor rules to the extent of the corporate partner's percentage interest in the partnership.

You also observed that paragraph 66.7(10)(e) applies upon acquisition of control of the corporate partner to deem all

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of the resource expenses previously incurred by the corporate partner to have been incurred by an original owner.

You noted, however, that there is no provision that is similar to paragraph 66.7(10)(e) which applies in respect of the resource expenses incurred during the partnership's fiscal period which deems the resource expenses incurred by the partnership up to the date of acquisition of control of the corporate partner to have been incurred by an original owner.

Consequently, it is your view that the resource expenses incurred by the partnership that are allocated to the corporate partner at the end of the fiscal period of the partnership would not fall within the ambit of the successor rules even though such expenses were incurred by the partnership prior to the acquisition of control of the corporate partner and the Canadian resource properties to which such expenses relate have been successored pursuant to paragraphs 66.7(10)(c) and (j).

We are not aware of any provisions in the Act which address your enquiry and accordingly, we have referred the matter to the Department of Finance for their consideration.

Thank you for bringing this matter to our attention.

Yours truly,

Section Chief
Resource Industries Section
Manufacturing Industries, Partnerships
and Trusts Division
Rulings Directorate

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