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.
Principal Issues: Whether cost amount of annuity contracts under pension plans of a pension trust is to be considered in the calculation of tax payable in 206(2)?
Position: Yes.
Reasons: Wording of the Act.
XXXXXXXXXX 5-982752
Fouad Daaboul
Attention: XXXXXXXXXX
February 8, 1999
Dear Sirs:
Re: Insured Annuities and Part XI taxes
We are writing in response to your letter of October 23, 1998, wherein you requested our views as to whether the cost amount of annuity contracts, described in paragraph 7 of Interpretation Bulletin IT-499R, held by a pension trust would be included in the cost amount of all of its property for the purposes of subsection 206(2) of the Income Tax Act (the "Act").
The provisions of subsection 206(2) of the Act do not provide for the exclusion of any properties when computing the cost amount of all of the property held by a taxpayer at a particular time. Consequently, it is our view that a taxpayer will include the cost amount of all of its property, including any annuity contracts, when computing any taxes payable under subsection 206(2) of the Act.
We trust our comments will be of assistance to you.
Yours truly,
Paul Lynch
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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