Understanding the Taxation of Partnerships, 8th Edition

The 8th Edition of Understanding the Taxation of Partnerships is the only publication in Canada that provides a comprehensive analysis of tax issues affecting one of the most common forms of business organization. This publication provides in-depth analysis of the tax issues that must be considered when a partnership is used as a business or investment vehicle and is truly a comprehensive treatise on the taxation of partnerships. The use of partnerships in tax planning has greatly evolved, and the tax regime that applies has consequently become much more complex.

The 8th includes significant updates made necessary by five years of domestic and international legislative developments.

The most notable of these changes include:

• Certain amendments to the Income Tax Act announced in the 2018 Federal Budget designed to overturn the decision of the Federal Court of Appeal in Green v. R., 2017 DTC 5068 (FCA), and to restore the long standing CRA administrative position relating to the application of the limited partnership loss rules in tiered partnership structures;
• The introduction in the Excise Tax Act of new rules applicable to “investment limited partnerships” (“ILPs”);
• Internationally, Canada became a signatory to the MLI at the end of 2017 and deposited its instrument of ratification with the OECD on August 29, 2019, with the result that the MLI entered into force for Canadian purposes on December 1, 2019;
• In addition to domestic and international legislative developments, the body of case law on the taxation of partnerships continues to evolve. In 594710 British Columbia Ltd. v. R., 2018 DTC 5111 (FCA), and Gladwin Realty v. The Queen, 2020 DTC 5074 (FCA), the Federal Court of Appeal applied the general anti-avoidance rule (“GAAR”) to deny taxpayers the tax benefits of certain planning transactions involving partnerships.

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