ARTICLE · 27 SEPTEMBER 2016

Package And Bump Transactions Not Subject To GAAR

Stikeman Elliott LLP

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When BPC Properties Ltd. (BPC) and Oxford Properties Inc. (Oxford) entered into an agreement relating to the sale of Oxford to BPC in August 2001...

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When BPC Properties Ltd. (BPC) and Oxford Properties Inc. (Oxford) entered into an agreement relating to the sale of Oxford to BPC in August 2001, Oxford agreed to complete a pre-closing reorganization of its business. Oxford dropped various properties down into several limited partnerships on a tax deferred basis by utilizing subsection 97(2) of the Income Tax Act (Canada) (the ITA), with those partnership interests subsequently being bumped under paragraph 88(1)(d) of the ITA.

After the completion of the purchase and sale transaction, BPC completed a second bump by transferring certain bumped interests into newly formed property-specific limited partnerships, and subsequently wound-up the upper-tier limited partnerships under subsection 98(3) of the ITA, using the bump rules in paragraph 98(3)(c) of the ITA.

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