2017 Ruling 2017-0699531R3 - Application of section 115.2 -- summary under Paragraph 115.2(2)(c)

CRA ruled that the s. 115.1(2)(c) safe harbour was available, respecting the acquisitions and dispositions by, and management/advice of, the Canadian manager, where a non-resident (the “Taxpayer”) invested in units of a top-tier LP which invested in project-specific subsidiary LPs that granted mezzanine financing to borrowers and, through a Canadian taxable corporate subsidiary, were granted profit participations in the borrowers. CRA accepted that the Taxpayer not being a direct member of the lower-tier project partnerships did not jeopardize the s. 115.2 safe harbour, and also accepted that the Taxpayer being a non-resident subsidiary of a Canadian corporation that had exactly a 50% voting and equity interest in the wholly-owning Canadian parent of the manager did not engage the exclusions in s. 115.1(2)(c)(ii).