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: Can we provide an opinion that a proposed $XXXXXXXXXX contribution to an RCA is reasonable for purposes of the Act?
Position: No.
Reasons: Without a request for an advance income tax ruling detailing all of the facts and proposed transactions, we should not provide any comments.
XXXXXXXXXX 2000-005479
M. P. Sarazin
Attention: XXXXXXXXXX
December 4, 2000
Dear Sirs:
Re: Reasonable Contribution to a Retirement Compensation Arrangements
This is in reply to your letter of November 6, 2000, requesting an opinion that the proposed contribution of $XXXXXXXXXX to a retirement compensation arrangement ("RCA") established for the benefit of the owner of the contributing corporation would be reasonable for the purposes of section 67 of the Income Tax Act.
In your letter you have outlined what is an actual fact situation related to proposed transactions. As noted in Information Circular 70-6R3 (available at your local tax services office or on the internet at www.ccra-adrc.gc.ca/formspubs/menu-e.html), this directorate can only provide an opinion concerning the tax consequences associated with specific proposed transactions in the form of an advance income tax ruling.
The determination of whether a particular contribution to an RCA is reasonable is a question of fact. We can only make this determination where all of the facts and proposed transactions are disclosed in a submission for an advance income tax ruling. Consequently, we can not provide you with any meaningful general comments.
Yours truly,
Roberta Albert, CA
for Director
Financial Industries Division
Income Tax Rulings Directorate
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