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: Can non-employees participate in a group TFSA of an employer?
Position: Yes
Reasons: Provided the provisions of paragraphs 146.2(2)(b) and (c) are met and the TFSA arrangement does not provide an advantage to the participants under 207.01(1).
Mr Don Sequeira
Registered Plans Directorate 2008-029623
112 Kent St. Tower B Bruce Hartt
Ottawa, ON K1A 0L5 (613) 948-5273
November 25, 2008
Dear Mr. Sequeira:
Re: Non-Employee Participation in an Employer Group Tax-Free Savings Account ("TFSA")
This is in response to your facsimile of September 30, 2008, wherein you requested our comments on whether or not there are legislative reasons that would prohibit spouses of employees from participating in a group TFSA of an employer.
Paragraph 146.2(2)(c) of the Income Tax Act (the "Act") requires that a TFSA arrangement prohibit anyone other than the holder from making contributions to the TFSA. However, it is possible for contributions to be made on behalf of the holder under an agency agreement, such as contributions made under an employer-sponsored group arrangement. In our view, provided the provisions of paragraphs 146.2(2)(b) and 146.2(2)(c) of the Act are met and the group TFSA arrangement does not provide an advantage to the participant, there is no legislative reason for not allowing the spouse of an employee to either contribute directly to an employer-sponsored TFSA or alternatively, the spouse give an amount to the employer and the employer would act as agent for the spouse and contribute the amount to the group TFSA on the spouse's behalf.
We trust the above comments will be of assistance.
Yours truly,
Mary Pat Baldwin, CA
for Director
Financial Sector and Exempt Entities Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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