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 CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
PRINCIPAL ISSUE:
Whether an election pursuant to subsection 207.5(2) of the Act 207.5(2) can be made if the RCA holds pooled or mutual fund.
Position: No
REASON: Legislative analysis and previous position.
June 12, 2002
WINNIPEG TAXATION CENTRE HEADQUARTERS
Gaby Lesperance L. J. Roy, CGA
RCA Unit (613) 957-8968
2002-012817
Subsection 207.5(2) of the Income Tax Act
This is in reply to your fax of May 12, 2002 regarding the application of subsection 207.5(2) of the Income Tax Act ("Act") where a retirement compensation arrangement ("RCA") holds a pooled or mutual funds.
An election under subsection 207.5(2) of the Act may only be made where the subject property of the RCA trust, if any, consists only of cash, debt obligations, shares listed on a prescribed stock exchange, or any combination thereof.
In our view, where the subject property of an RCA trust includes units in a mutual fund trust or shares in a mutual fund corporation which are not listed on a prescribed stock exchange, the requirements of subsection 207.5(2) of the Act will not be met and the RCA will not qualify for the election.
Ghislain Martineau
Section Manager
for Division Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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