Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Deferral of implementation date for position on application of advantage tax rules to investment management fees.
Position: Confirmed that position is deferred until Finance completes its review.
2018 CTF Annual Conference
CRA Roundtable
Question 12: Application of advantage tax rules to investment management fees
At the 2016 Round Table, the CRA commented on the application of the advantage tax rules where investment management fees relating to securities held in an RRSP, TFSA or other registered plan are paid by the plan holder with funds from outside of the plan. The CRA initially proposed to apply the technical position effective January 1, 2018, but subsequently deferred its implementation to January 1, 2019. Can the CRA provide any update?
CRA Response
The CRA has considered a number of submissions from various stakeholders and is sensitive to the concerns raised about the administrative difficulties in complying with the position.
The Department of Finance Canada advised us earlier this year that they will be reviewing the issue from a tax policy perspective. As a result, in our letter of September 28, 2018 (2018-077926), we announced that we would defer implementation of the position pending completion of this review.
On October 1, 2018, the CRA published Income Tax Folio S3-F10-C3, Advantages – RRSPs, RESPs, RRIFs, RDSPs and TFSAs with a three-month comment period. The Folio is largely silent on the treatment of various fees incurred in connection with registered plans. Following the conclusion of the comment period and the Finance review, we intend to update the Folio to provide additional guidance on fees (in addition to any changes resulting from our review of suggestions received during the comment period).
D. Wurtele
2018-078502
November 27, 2018
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