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: Whether investment counselling fees paid in respect of securities of an RDSP are deductible if they are paid by the holder of the RDSP?
Reasons: The requirements of 20(1)(bb) are not met.
August 25, 2014
Re: Investment Counselling Fees for RDSP Property
We are responding to your email of April 4, 2014, concerning certain investment counselling fees paid in connection with a registered disability savings plan (an "RDSP").
You are asking about a deduction under paragraph 20(1)(bb) of the Income Tax Act (the "Act") for investment counselling fees that are paid in connection with investments in a RDSP. In particular, you are enquiring about whether such fees would be deductible under paragraph 20(1)(bb) of the Act if they were paid by the holder of the RDSP.
Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings, dated May 17, 2002. Also, where the particular transactions are completed, the inquiry should be addressed to the relevant Tax Services Office. Nonetheless, we have provided some general comments below.
One of the requirements for a deduction under paragraph 20(1)(bb) of the Act is that the amount must be paid either for advice for purchasing or selling a specific share or security of the taxpayer or for services in respect of the administration or management of shares or securities of the taxpayer. Accordingly, this requirement would not be satisfied if the amount was paid by someone other than the owner of the shares or securities. In this case, the owner of the shares or securities is the trust governed by the RDSP. Therefore, if the fees are paid by the holder of the RDSP, they are not deductible under paragraph 20(1)(bb) of the Act.
We trust that these comments will be of assistance.
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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