Income Tax Severed Letters - 1996-10-18

Principal Issues:

1)RRSP & RRIF admin fees;

2)RRSP & RRIF investment management fees

Position:

1)Confirming new position that administration fees paid inside RRSP or RRIF trust do not constitute benefit or amount received to annuitant;

2)Confirming old position that investment management fees paid by annuitant are considered payment of a premium to RRSP but not a gift to RRSP for section 146 and Part X.1 purposes; confirming that payment of such RRIF expenses by annuitant is forbidden by 146.3(2)(f) and would cause income inclusion under 146.3(11).

Reasons:

Principal Issues:

Can a shareholder of a CCPC crysallize gains on a merger with a public corporation.

Position:

No.

Reasons:

Principal Issues:

Is the RRSP issuer or carrier required to maintain a spousal designation of an RRSP following the death of the contributing spouse?

Position:

NO

Reasons:

Principal Issues:

Does an annuity that may have a variable guaranteed term that does not appear to be wholly or partly dependent on the beneficiaries life qualify as a prescribed annuity (PAC) under section 304 of the Regulations.

Position:

Advised to come in for ruling since this is a question of fact. We have concerns that the proposed annuity may not qualify since the term is not certain and the investment income of the issuer may be "shared" with the beneficiary.

Reasons:

Principal Issues:

principal residence: If taxpayer shares ownership of a parcel of land larger than 1/2 hectare with other joint tenants, can each joint tenant consider his or her ownership to be a proportionate share of the total so that it is no necessary to prove the need for the land in excess of 1/2 hectare in order to fully exempt the property under the p/r rules?

Position:

when each joint tenant is allocate a proportionate share of the land for his or her use, along with a residence, we will consider a joint tenant's ownership of the land to be represented by a proportionate share of the total -thus, in the situation described, the deceased brother would be able to fully shelter any gain on the deemed disposition of the property without being required to prove the need for land in excess of 1/2 hectare, even though the law with respect to joint tenancy or tenancy in common gives him an undivided share in the ownership of the entire parcel of land

Reasons:

Principal Issues:

1.Availability of income tax refund when corporation has paid instalments in respect of a particular taxation year but did not file the required tax return within three years as required by subsection 164(1).

2.Department's authority to refuse to refund, carry back or forward overpayment of taxes.

Position:

1.overpayment not available for refund, carry back or carry forward.

2.Only authority to refund is 164(1) which provides for the three year limitation period.

Reasons:

Position Adoptée:

Principales Questions:

Les sociétés de personnes qui existaient avant le 1er janvier 1994 étaient tenues de déposer au registre des entreprises individuelles des sociétés et des personnes morales, une déclaration d'immatriculation à défaut de quoi, l'article 115 de la Loi sur l'application de la réforme du Code civil prévoit que ces sociétés de personnes deviennent des sociétés de personnes en participation. Quel est le traitement fiscal accordé à une société de personnes en nom collectif qui omet de s'enregistrer?

Position Adoptée:

Principal Issues:

coverage of same sex partners under an employer's health care plan

Position:

coverage does not taint plan's qualification as a phsp

Reasons:

Principales Questions:

Est-ce que les sommes versées à des personnes dans le besoin par un organisme de bienfaisance sont imposables et est-ce que l'organisme doit émettre un feuillet à cet effet?

Position Adoptée:

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.

Canada Mortgage and Housing Corporation
Winnipeg Branch Office
P.O. Box 964							962846
4th Floor								B. Kerr
10 Fort Street
Winnipeg, Manitoba

Attention: Peter Sanderson

September 9, 1996

Dear Sirs:

Re: Limited Dividend Housing Companies