Section M – Summary of arrangements

Complete this section to provide an explanation for the following situations:

• If you answered yes in question 6 in Section B, describe the nature of any amount or benefit listed, including the timing, the parties involved, and whether they deal at non-arm's length with the buyer or the promoter.
• If you answered no in question 8 in Section C, describe how the recipients will be involved, and what responsibilities they will have in the arrangement. Include any documents that were presented to the recipients to explain the arrangement, or the involvement of the recipient in the arrangement.
• If you answered yes to the question Is there an application to become a beneficiary of the trust? in Section H, but there is no application, provide a description of how a person becomes a beneficiary and what the criteria is for accepting them.
• Provide a brief overview of the arrangement (1-2 pages) as described in the next section.

If there is not enough space, attach a separate sheet using the same format as on this form.

Overview of the arrangement

The information in the brief overview of the arrangement must be sufficient so we can comprehend the manner in which the arrangements are intended to operate. This should be a straightforward description highlighting:

• the aim of the arrangements;
• the entities involved and the relationships, contractual or otherwise, between the entities;
• the steps involved and the tax law, if any, which the arrangements rely on.

Where complex transactions are involved, include a flowchart of the arrangements and parties involved. For example, any proposal for any promoter-preferred financing should be disclosed.

Include information explaining each "element" of the proposed arrangements from which the expected tax advantage obtained under those arrangements arises (including the way in which the arrangements are structured).

Provide references to the precise location of each item of information (for example, responses such as "see prospectus" are incomplete—you have to provide the precise annex number, page number, and paragraph or clause reference).

What is an element?

An element is "any element of the arrangements (including the way in which they are structured) from which the tax advantage expected to be obtained arises." An element includes, but is not limited to:

• a financial product;
• a way of combining that financial product with other elements of the arrangements;
• a way of interpreting the tax legislation in relation to the financial arrangements, that is, the tax analysis which underlies the structuring of the arrangements;
• the responsibilities and duties of each person involved in the arrangement;
• the benefits to be obtained;
• the method for participation in the arrangement; and
• any agreements or proposed agreements between the arrangement entities and the applicant (or any entity associated with applicant) including loans, subcontracting arrangements, arrangements relating to the acquisition of assets and the distribution of profits arising from the arrangement.

You have to provide copies of each document with the application. If you are unable to provide a document, complete Section L – Outstanding items to explain why you are unable to do so. Where available, also provide copies of the following documents:

• management agreements;
• loan agreements and other finance documentation;
• marketing materials and any promotional material issued or to be issued to participants, financial planners or advisors or commission agents;
• any written information to be provided to participants regarding their investment;
• any other agreements or contracts including purchase agreements, rental agreements, franchise agreements;
• flow chart(s) detailing the flow of funds (as amounts per participant) between the participant, promoter, financier, trustee, manager, and any other entity in receipt of the investment funds (including directors, officers, shareholders, partners and beneficiaries of these entities, as well as their residency status);
• working papers and any other materials used in setting the fees payable by a participant.

If not included in the documents, describe:

• the training or expertise of the persons involved with the activity;
• your plan to make the activity profitable; and
• the capability of the venture as capitalized to show a profit.

Forms and publications

• Form T5001, Application for Tax Shelter Identification Number and Undertaking to Keep Books and Records

Date modified:

2016-03-04