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 Issues: General information about PHSP's for sole proprietors.
Position: Referred them to IT-339R2.
Reasons: They had no specific interpretative question.
XXXXXXXXXX 2002-015020
J. Gibbons, CGA
January 14, 2003
Dear XXXXXXXXXX:
Re: Private Health Services Plan
We are replying to your facsimile sent July 2, 2002, concerning cost-plus "private health services plans" (PHSP's). You advised us that your company is in the business of administering such plans, and you wish to have our general comments about the contracts it uses to enter into such arrangements.
Our mandate at the Income Tax Rulings Directorate is to provide advance income tax rulings and technical interpretations upon which our clients can rely. Therefore, we would be pleased to address any specific questions you may have regarding PHSPs; however, we cannot simply undertake to review documents without reference to any specific issue. We are, however, prepared to provide you with the following general comments.
Basic information about PHSP's can be found in Interpretation Bulletin IT-339R2, "Meaning of 'Private Health Services Plan'". As indicated in paragraph 3 of that Bulletin, it is CCRA's position that a plan of insurance must include an undertaking by one person to insure another person. In the case of cost-plus plans, it is our view that where such a plan provides coverage solely for a sole proprietor and family members who are not employees, it is not a plan of insurance and will not qualify as a PHSP.
We trust that these comments will be of assistance.
Yours truly,
Daryl Boychuk, LL.B
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
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