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.
November 10, 1999
XXXXXXXXXX
Dear Colleague:
Thank you for your letter of May 28, 1999, addressed to my predecessor, the Honourable Herb Dhaliwal, on behalf of XXXXXXXXXX, who has questions about limited partnerships. As you know, on November 1, 1999, Revenue Canada became the Canada Customs and Revenue Agency (CCRA).
Provincial legislation, such as the Ontario Partnerships Act and Limited Partnerships Act, serves to govern the nature and operation of business activities carried on by a partnership, including the declarations required for the formation of a limited partnership.
The Income Tax Act contains rules which govern the income taxation of partnerships and partners, including limited partners. These rules become applicable, however, only after a partnership has been found to exist pursuant to the relevant provincial legislation.
The Act does contain registration requirements for "tax shelters", as that term is defined, and a particular partnership or limited partnership may be a tax shelter for these purposes. However, the issuance of such a registration number does not indicate the CCRA's acceptance of the tax results from the tax shelter investment. Rather, these identification numbers serve to facilitate the tracking by the CCRA's of tax shelter investments and deductions therein by investors.
You have also asked what regulations are in place to govern the conduct and responsibilities of lending institutions financing limited partnerships. Such regulations, if any, would come under the responsibility of the Department of Finance. In this regard, I have forwarded a copy of our correspondence to the Honourable Paul Martin, Minister of Finance, for his consideration.
I trust this is of assistance.
Yours sincerely,
Martin Cauchon
C.C. The Honourable Paul Martin, P.C., M.P.
Minister of Finance
P. Lynch
957-3493
October 12, 1999
992604