The Canada Revenue Agency (the "CRA")
has announced that registered charities must now report their
holdings in limited partnerships. Although the CRA announcement is
dated December 1, 2015, notice of the new requirement was only
circulated with the CRA's January 25, 2016 "Charities and
giving – What's new" publication.
The limited partnership reporting requirement stems from the
2015 Federal Budget proposal (as yet not law) which provided that a
registered charity would not be considered to be carrying on a
business by virtue of certain investments in limited partnerships.
In order for a charity's investment in a limited partnership to
fit within the Budget proposal, a charity must be a limited partner
(not a general partner) and must deal at arm's length with
every general partner and the fair market value of its interest
(and any interests of the charity's non-arm's length
entities) must not exceed 20%.
