17 March 1995 External T.I. 9506685 - ELIGIBLE FUNERAL ARRANGEMENT

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

                					950668
XXXXXXXXXX						C.R. Bowen

Attention: XXXXXXXXXX

March 17, 1995

Dear Sirs/Mesdames:

Re: Eligible Funeral Arrangements

We are writing in reply to your letter of February 20, 1995 addressed to the Vancouver District Taxation Office, which was forwarded to us for reply, wherein you requested information concerning "eligible funeral arrangements".

The definition of "eligible funeral arrangement" in draft subsection 148.1(1) of the Income Tax Act (the "Act") is contained in Bill C-70 which received its first reading in the House of Commons on February 16, 1995. That definition is intended to apply to arrangements which provide for the pre-funding of expenses with respect to funeral, burial, cremation or cemetery arrangements. These arrangements are subject to provincial legislation and would include arrangements commonly referred to as pre-need assurance funds, pre-paid funeral arrangements, pre-arranged funeral services and care and maintenance funds.

Based on draft paragraph 149(1)(s.1) of the Act, as contained in Bill C-70, we confirm that there will be no income tax payable under Part I of the Act by trusts governed by eligible funeral arrangements for their 1994 taxation year. In addition, based on the draft amendments to the Income Tax Regulations announced in the Finance Canada New Release dated October 21, 1994, we confirm that such arrangements will not be required to file 1994 T3 Trust Income Tax and Information Returns (which include T3 Supplementary slips).

Once draft paragraph 149(1)(s.1) of the Act is enacted, Revenue Canada will accept requests from eligible funeral arrangements to amend their 1993 T3 Trust Returns. Such a request must be submitted in writing to the Taxation Centre where the return was filed. The letter should state that the trust meets paragraph 149(1)(s.1) of the Act and request that its 1993 T3 Trust Return be reassessed since no income tax is payable under Part I of the Act for that year. No reassessment will be issued unless such a request is received.

Points 3 to 5 of your letter contained many other questions relating to filing of information slips for eligible funeral arrangements. As discussed in our telephone conversation (XXXXXXXXXX\Bowen) on March 14, 1995, these issues have not been resolved at this time and your letter is being forwarded to Chris Foran of the Information Returns Section

(613) 952-6229 for his reply once the issues have been resolved.

We trust that our comments will be of assistance.

Yours truly,

for Director
Manufacturing Industries, Partnerships
and Trusts Division
Rulings Directorate
Policy and Legislation Branch

c.c. Chris Foran

Information Returns Section

b.c. Pat McLauglin

T3 Programs Section