CRA finds that a corporate partner carries on the business of the partnership for TOSI (and other) purposes

CRA considers that (at least in the common law provinces) each partner of a partnership should be considered to carry on the business of the partnership. Accordingly, where an inactive spouse holds 10% (by votes and value) of a Partnerco of a partnership carrying on an active non-services partnership, the Partnerco will be considered to carry on directly the “related business” (i.e., the business of the partnership), so that the test to this effect in the “related share” definition in s. 120.4(1) will be considered to be satisfied.

Neal Armstrong. Summary of 9 August 2019 External T.I. 2019-0813021E5 under s. 120.4(1) – excluded share – para. (c).