In addition to the specific provisions relating to lending arrangements between the company partner and the partnership, CTA 2009, Pt. 5 contains other provisions which could affect the calculation of debits and credits on loan relationships where the company partner has a connection to another company.

Where a company stands in the position of debtor or creditor (directly or indirectly) with another connected company, it is treated as having a connected company relationship (CTA 2009, s. 348).

CTA 2009, s. 466 provides the basic definition of ‘connected’ as being where:

A controls B;

B controls A; or

A and B are both controlled by the same person.

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