Tax Topics number 1984 (March 18, 2010) has an interesting article on estate freezes using partnerships in light of Krauss v. The Queen, 2009 TCC 597.
The CRA, of course, for some time now has taken the position that an estate freeze cannot be effected using a partnership in light of subsection 103(1) and (1.1) of the Income Tax Act. The Tax Court judge in Krauss, in obiter, purported to “begin from the premise that structured properly, a partnership can replace a typical estate freeze through a corporation.” (¶43) The comment was obiter because the judge dismissed the appeal before him. Nonetheless, his comments raise the possibility that a freeze could be completed using a partnership.
