If you answered yes to question 3 in Section B, or to question 4 in Section C, you have to complete Section E and provide the additional information requested below.

Lender's name and address

Enter the name and complete address of each lender for this tax shelter. Follow the instructions for Complete address.

You have to list all the entities involved in providing financing to participants, starting with the one lending to the person acquiring the tax shelter. Include:

• the arrangement entities
• any related or non-arm's length entities
• "preferred investment dealers" (those promoted by any of the arrangement entities, or a promoter or any associated entity that will provide financing to participants)
• any series of financial arrangements flowing through other persons or entities (include a flowchart showing the flow of funds)

Arm's length with the principal promoter?

For each lender, tick (✔) the appropriate column. If there is not enough space, attach a separate sheet using the same format as on this form.

Arm's length refers to a relationship or a transaction between persons who act in their separate interests. An arm’s length transaction is generally a transaction that reflects ordinary commercial dealings between parties acting in their separate interests.

Related persons are not considered to deal with each other at arm’s length. Related persons include individuals connected by blood relationship, marriage, common-law partnership or adoption (legal or in fact). A corporation and another person or two corporations may also be related persons.

Unrelated persons may not be dealing with each other at arm’s length at a particular time. Each case will depend upon its own facts. The following criteria will be considered to determine whether parties to a transaction are not dealing at arm’s length:

• whether there is a common mind that directs the bargaining for the parties to a transaction
• whether the parties to a transaction act in concert without separate interests; "acting in concert" means, for example, that parties act with considerable interdependence on a transaction of common interest
• whether there is de facto control of one party by the other because of, for example, advantage, authority or influence

For more information, see the Income tax folio S1-F5-C1, Related persons and dealing at arm's length.

Non arm’s length generally refers to a relationship or transaction between persons who are related to each other.

However, a non-arm’s length relationship might also exist between unrelated individuals, partnerships or corporations, depending on the circumstances. For more information, see the definition of Arm’s length.

Additional information required

Attach to the application any draft agreement, note, or similar document that will be used in respect of the loan. If all agreements are the same, send one blank copy. If agreements vary from one participant to another, send one copy of each agreement that is different. Include financing arrangements between potential investors and third parties (where such financings are to be used to promote the sale of the tax shelter, or forms part of the arrangement).

Forms and publications

• Form T5001, Application for Tax Shelter Identification Number and Undertaking to Keep Books and Records
• Income tax folio S1-F5-C1, Related Persons and Dealing at Arm’s Length