Partnerships and being a relative

How does the presence of a partnership in a structure affect the analysis of whether persons are related under section 251 of the Income Tax Act (Canada)?

  • A partnership is not a person for the purposes of section 251
  • Where a corporation controls a partnership that controls another corporation, the first corporation will be related to the other corporation.
  • A partnership that controls a corporation does not deal at arm’s length with the corporation.
  • A partner who controls a partnership does not deal at arm’s length with the partnership.

Jin Wen, “Partnership and the Meaning of ‘Related'” (Oct 2019) 19:4 Tax for the Owner-Manager

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