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.
Principal Issues: What is CRAs position concerning the implementation of the 2005 Budget proposal to eliminate the foreign content limits for registered plans?
Position: Provided confirmation of the Commissioner's position on this matter.
Reasons: To provide assurance on the way the provisions will be applied..
XXXXXXXXXX 2005-012865
W. C. Harding
May 25, 2005
Dear XXXXXXXXXX:
Re: Part XI Tax on Foreign Property held in Trusts governed by Registered Plans
I am replying to your letter of April 27, 2005, addressed to Mr. George Arsenijevic, Director General, Individual Returns and Payments Processing Directorate, wherein you requested confirmation that a trust governed by a registered plan will not be subject to Part XI taxes in respect of excess foreign property, if the annuitant of the arrangement, acting on the 2005 budget proposal to eliminate the tax, exceeds the current limit on foreign property that may be held by such plans.
The Agency's position is that taxpayers will not be subject to taxes if they have, in good faith, acted on the basis of budget proposals initiated by the Minister of Finance that are not subsequently enacted into law. However, taxpayers would be expected to act promptly to bring their affairs into accordance with the law once it is established that the proposals will not be enacted.
I appreciate the opportunity to respond to your concerns on this important issue.
Yours sincerely,
Mickey Sarazin
Acting Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Planning Branch
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