CRA considers GAAR to be applicable where a holding partnership is used to avoid s. 84.1

CRA has indicated that it has previously concluded that there is an abusive avoidance of s. 84.1 resulting in the application of the anti-avoidance rule where all the shares of a family farm corporation are rolled into a family partnership whose only asset is those shares, and the family partnership is subsequently sold (utilizing the capital gains exemption) to a family Newco for notes of the Newco.  In situations where the partnership has other (farming) assets as well (as posited in this technical interpretation), then "in order to determine if there is an abuse having regard to section 84.1, the CRA would need in particular to consider the source of funds used to pay off the consideration for the disposition of the partnership interests, as well as the value attributable to the shares of the corporation held by the partnership relative to the total value of the interests in the partnership" [TaxInterpretations transalation].

The hypothetical facts also posited a five-year gap between the roll-in of the family farm corporation shares into the partnership, and the sale of the partnership interests for the Newco notes.  In this regard, CRA noted the broad meaning accorded to "series of transactions" by Canada Trustco and Copthorne in light of s. 248(10) - i.e., the subsequent sale presumably would be considered by CRA to have been made "in contemplation of" the previous roll-in transaction.

Neal Armstrong.  Summary of 3 July 2012 T.I 2012-0443421E5 F under s. 245(4).