distribution

The appellant subscribed $310 million for units of various income funds, which were intended to qualify as mutual fund trusts on the basis that each had received subscription proceeds totaling $128,250 from 171 investors, with each such investor subscribing for 100 units at $7.50 per unit.

In order that the taxpayer’s RRSP could indirectly invest in operating businesses in which he and/or two business colleagues had a management role, he instigated the formation of various unit trusts (the “Income Funds”) which were intended to be mutual fund trusts on the basis of 171 individuals (the “Investors”) - being immediate and extended family members, friends, employees of businesses run by him, business associates and others - each subscribing $750 for units.

The taxpayers were the partners of a limited partnership which constructed a terminal and jetty in St. John to which liquid natural gas would be delivered by tanker (at the jetty), "regasified,", and then delivered to a pipeline for shipment to the U.S. resellers.

The taxpayers were related companies, and the general partner and a 75% limited partner of a partnership which constructed a terminal and jetty in St. John to which liquid natural gas would be delivered by tanker (at the jetty), "regasified," tested and processed to meet quality standards such as flammability and low O₂ content, and then delivered to a pipeline for shipment to the U.S. resellers.

The other partners of the partnership consented to a reduction in the taxpayer's partnership interest from 40% to 15%, and to an increase in the partnership interest of a corporation ("WBG") of which he had voting control from 10% to 35%.