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.
Dear Sirs:
This is in reply to your letter of October 2, 1990 wherein you requested our opinion on the application of the foreign property rules contained in Party XI of the Income Tax Act (the "Act") to a trust governed by a group RRSP as described in paragraphs 9 and 10 of Information Circular 72-22R7.
Group RRSPs are not recognized nor provided for under the provisions of the Act but have been allowed on an administrative basis, where, given the circumstances, it was expedient to do so in order to provide ease of plan administration. The relief was not intended nor should it be applied to extend any benefit which is not otherwise appropriate given the intent of the Act as it pertains to RRSPs.
Where a plan member is allowed to direct how his contributions will be invested, it is our opinion that a single trust, as contemplated, may not exist and each annuitant may be considered to have a separate trust governed by a separate plan. Accordingly Part XI of the Act could not be applied to the common trust.
Notwithstanding the above, it is our understanding that the Department's Registration Directorate will, upon examining a specific group plan, allow it to be operated as a single trust, as described in the Information Circular, if it is understood and agreed by all parties that each annuitant's portion of the trust will be treated as a separate trust governed by a separate plan for all purposes of the Act as it applies to RRSPs. Accordingly, while each annuitant's segment of the trust would be subject to Part XI of the Act as if it were a separate trust, the common trust could still benefit from its administration on a group basis.
We trust these comments are satisfactory to your needs.
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1990
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1990
Email this Content