Tax Court 2018 TCC 152

In Spring 2011, US-based Blackstone Group LP and Alta Resources LLC formed Alta Energy Partners LLC (AEP) (Delaware).

• This was a holding company to poll the investments of Blackstone & Alta Resources

In June 2011, Blackstone group, Alta Resources, and AEP incorporated Alta Canada. Alta Canada was wholly owned subsidiary of AEP.

In Dec 2011, a repesentative of Blackstone sent a letter to tax authorities in Luxembourg seeking cofirmatoin of the tax regime that would apply to a future Luxembourg corporation after the restructuring of Alta Canada.

On April 19, 2021, Alta Luxemburg incorporated with Alta

Between June 2011 and April 2012, Alta Canada acquired licenses.

BCP

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Pass-through entity:

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Is the capital gain realized by the Appellant as the result of the sale of the shares taxable in Canada in view of Article 13(4) of the Treaty?

• No

Reasons: Appellants’ Alta

Appellant conceded that shares are taxable Canadian property under the ITA because the shares derived more than 50% of their value from [Alta Canada’S working interest which is a Canada resource property]

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Alta Can had licenses. the value of shares in alta canada is [likelt] the value of licenses. value of the shares it the disputed taxable thing here.

• For art. 13(4) of the treaty to apply, the license in the resource industry would have to be classifed as immovable property ???? And how do you classify a license as immovable property????

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Does the GARR apply to override the application of the luxembourg treaty?

• No

To determine whethere there was abuse, 2 step test:

1. Identification of object, spirit and purpose
2. determination if avoidance transaction frustrates or fall within that object, spirit and purpose —> overall result