2017 Ruling 2016-0660321R3 - Reorg of REIT to simplify multi-tier structure -- summary under Subsection 98(3)

Following the acquisition by a mutual fund trust (the “Fund”) of the limited partner units in, and the shares of the general partner (“GP II”) of, a limited partnership (“Opco Partnership”), Opco Partnership ins transferred to and wound-up into Partnership as follows:

  1. Fund will contribute its Opco Partnership Units and its shares of GP II to Partnership, giving rise to a credit to its capital account, with a joint s. 97(2) election being filed.
  2. Opco Partnership will be wound-up under s. 98(3), with each former partner receiving an undivided interest in each distributed property.
  3. GP II will sell its undivided interest in each property to Partnership for fair market value consideration and then will be wound up.

​​​​​​​Rulings re application of s. 98(3).

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Income Tax Act - s. 98(3)
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d7 import status
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