2004 Ruling 2004-0093591R3 - Withholding - GP corporation on loans to LP -- summary under Subparagraph 212(1)(b)(vii)

In order to access the more favourable terms available in the U.S. markets, the general partner of a publicly-traded limited partnership borrows on a private placement basis from arm's length U.S. institutional lenders and on-lends on similar terms (but with a mark-up on the interest rate) to the partnership. A ruling that s. 245(2) will not apply given that there is a business purpose, and the structure has been in existence for some time.