CRA rules on transactions where a mine which was planned to be restarted was represented to be excluded property

S. 95(2)(e) generally provides a rollover at the relevant cost base where a foreign affiliate is wound up into another, but not for the wind-up of a partnership – even apparently where the wind-up of the partnership occurs by operation of law as a result of its two FA partners being wound up into their FA parent.

In this general situation, CRA gave a ruling that a distribution of the assets of a mine held by the partnership did not give rise to foreign accrual property income provided that the assets were excluded property.  The mine in question had been previously shut down, but now further reserves had been identified and there was a plan to resume operations.

Summary of 2015 Ruling 2014-0536661R3 under s. 95(1) – foreign accrual property income.