2017 Ruling 2016-0660321R3 - Reorg of REIT to simplify multi-tier structure -- summary under Subclause 132.2(3)(g)(vi)(C)(I)

Background

As a result of quite a number of other transactions, a REIT (the “Fund”) holds the Class A LP Units of the Partnership (as well as the shares of the general partner - GP I, but not the Partnership’s Class B exchangeable LP units, and the Partnership holds Amalco MFC Class B shares of a mutual fund corporation (whose Amalco MFC Class A shares are held by the unitholders of Fund).

Transactions
  1. Amalco MFC will transfer all of its assets to the Fund in consideration for the assumption of its liabilities and the Fund’s agreement to issue Fund Units to the holders of the Amalco MFC Class A and B Shares in satisfaction of the redemption price for their shares (see 2 below), with a joint s. 132.2 election being made in due course.
  2. Immediately after the transfer in 1, Amalco MFC will redeem the Amalco MFC Class A and B Shares.
  3. Partnership will renounce all of its interest in the Fund, so that rather than receiving Fund Units, they will be cancelled.
Ruling

Partnership will not realize any gain or loss on the disposition of its Fund Units as a result of the renunciation in 3 because the proceeds of disposition of such units should be equal to their ACB pursuant to s. 132.2(3)(g)(vi)(C)(I).

Topics and taglines
Topic
Income Tax Act - s. 132.2(3)(g)(vi)(C)(I)
Tagline
d7 import status
Drupal 7 entity type
Node
Drupal 7 entity ID
498598
d7 import status
Drupal 7 entity type
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Drupal 7 entity ID
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