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:
Request for amendment of subsection 207.5(2) of the Act.207.5(2)
Position: Referred to Finance.
REASON: N/A
XXXXXXXXXX 2002-014054
L. J. Roy, CGA
June 12, 2002
Dear XXXXXXXXXX,
Re: Review of subsection 207.5(2) of the Income Tax Act
This is in reply to your letter of May 1, 2002, which was addressed to the Winnipeg Taxation Center and forwarded to us for reply. You requested that subsection 207.5(2) of the Income Tax Act ("Act") be reviewed to include the election to claim refund where the retirement compensation arrangement ("RCA") also holds shares in a 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.
Consequently, in order for subsection 207.5(2) of the Act to apply where the RCA holds investments in a mutual funds, legislative amendments to the Act would be required. These are the responsibility of the Department of Finance. If you wish to pursue this matter with the Department of Finance, Tax Policy Branch, they can be contacted at:
L'Esplanade Laurier
140 O'Connor Street
Ottawa ON K1A 0G5
We trust our comments will be of assistance to you.
for Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Legislation Branch
c.c. Gaby Lesperance: Winnipeg Taxation Centre
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