GST/HST Rulings and
Interpretations Directorate
Place Vanier, Tower C, 10th Floor
25 McArthur Road
Vanier, Ontario
XXXXX K1A 0L5
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Subject:
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GST/HST INTERPRETATION
Legal Services Performed Before 1991 - Section 341.1 of the Excise Tax Act
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Dear XXXXX
Thank you for your letter of May 16, 1997, (with enclosures) concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the supply of services provided before 1991 and invoiced after April 1991. I apologize for the delay in responding to your letter.
You had requested a ruling in your submission. GST rulings are only provided in relation to fact situations. As your letter did not provide more specific details, and is general in nature, we are pleased to provide you with the following interpretation.
Our understanding of the facts is as follows.
Statement of Facts
• You were appointed the executor and trustee of the estate of XXXXX 1990, in accordance with the terms of XXXXX will.
• Grant of Letters Probate was issued to you on XXXXX 1991.
• As XXXXX will did not make specific provision for your compensation as trustee of his estate, you must look to XXXXX
• The Trustee Act provides that a trustee is entitled to a fair and reasonable allowance XXXXX In addition, an annual care and management fee not exceeding . XXXXX may, upon application to the Court, be paid and is at the sole discretion of the Court.
• You are now in a position to distribute the estate. A compensation calculation schedule has been prepared by your office and a copy provided to this Department. The schedule includes a separate computation of the GST and identifies those amounts which you feel will be not be subject to GST.
Interpretation Requested
Are the services of a personal representative in respect of the administration of an estate supplied before January 1, 1991, eligible for tax relief under section 341.1 of the Excise Tax Act ("the Act")?
Interpretation Given
Based on XXXXX of the Act, no tax is payable in respect of the consideration for a supply of a service of a personal representative or trustee to the extent that the consideration relates to any part of the service that was performed before 1991 and does not become due until either (a) approved by all beneficiaries of the estate (b) in accordance with the terms of the trust binding the personal representative, or (c) as approved by the Court.
The services provided by you in respect of the administration of the estate before 1991 meet the conditions for tax relief under subsection XXXXX of the Act and no GST will be payable on this amount. The portion of the billing that applies to the services rendered after 1991 are taxable in accordance with the general rules for imposition of the GST contained in subsection 165(1) of the Act.
We note that you have provided a copy of the Calculation of Compensation statement, which includes a separate calculation of the GST applicable, where the GST is calculated on a pro-rata (e.g) basis. Only those services which were actually performed by you prior to 1991 are eligible for tax relief under subsection XXXXX of the Act. Your submission does not address when the services are performed. The onus is on you to prorate the consideration for the services on a reasonable basis in order to account for the tax accurately. It is a question of fact as to when the services are performed.
The foregoing comments represent our general views with respect to the subject matter of your letter. Proposed amendments to the Excise Tax Act, if enacted, could have an effect on the interpretation provided herein. These comments are not rulings and, in accordance with the guidelines set out in section 1.4 of Chapter 1 of the GST Memoranda Series, do not bind the Department with respect to a particular situation.
Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at 613 954-2560.
Yours truly,
KerriAnne Boyd
A/Rulings Officer
General Operations Unit
General Operations and Border Issues Division
GST/HST Rulings and Interpretations Directorate
c.c.:
Encl.:
Legislative References: 123(1), 341, 341.1
NCI Subject Code(s): 11745-5
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