The en commandite partnership as a tax structuring tool.
The aim of this technical report is to provide a detailed and critical review of the suitability of the en commandite partnership for tax structuring both generally and specifically. The report takes cognisance of the requirements that a financial institution might consider in its determination of the utility of the en commandite partnership as a tax structuring tool in a structured or corporate finance environment. The report begins with an overview of the primarily legal requirements for the creation of a valid partnership. It then considers specifically whether the en commandite partnership is able to take the place of the 'Lessor Trust Arrangement' and researches specific issues germane to the enquiry. Specific legislation dealing with en commandite partnerships is then researched and includes a commentary on the provisions of s 24H and s 8(5)(a) of the Income Tax Act. Practical examples of the use of the en commandite partnership are then considered which challenges the concept of traditional loan finance and suggests the capital contribution as a tax efficient alternative. A consideration of the possibility of a challenge under the anti-avoidance provisions of the Income Tax Act concludes the report.