Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Revenue Canada Round Table
Canadian Petroleum Tax Society Conference
June, 1994
Question No. 10
SUCCESSOR RULES
For the purposes of the successor election rules contained in section 66.7 of the Act, an "original owner" is defined in subsection 66(15) of the Act as, generally speaking, a person who previously owned a Canadian resource property or a foreign resource property and disposed of such property in certain circumstances. Because an original owner must be a person, it appears that resource properties originally acquired by a partnership cannot be subject to the successor provisions in section 66.7 of the Act. In addition, a partnership would not have resource expense pools which would be eligible for the successor election. Will the Department consider each partner of a partnership as being the original owner of that partner's proportionate share of the partnership's resource properties for the purpose of section 66.7 of the Act, thereby allowing successor elections to be made on a partner by partner basis by the purchaser and each partner of the vendor partnership provided that the other requirements of section 66.7 of the Act are met on a partner by partner basis?
Department's Position
Our longstanding position is that for purposes of section 66.7 of the Act, a person who has an interest in a partnership does not own a proportional share of the partnership property, except where paragraph 66.7(10)(j) of the Act applies to deem the partner to have owned the Canadian resource property of the partnership. Thus, the partner will not be considered as an "original owner" eligible for an election under subsection 66.7(7) of the Act with respect to Canadian resource property originally acquired and held by the partnership.
Author: Bruce Rankin
File: 941030
Date: June 1994