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 it is permissible for the purpose of clause 149(1)(o.2)(iv)(C) for the related segregated fund trust to have only one beneficiary.
Position: Yes, provided the beneficiary is a registered pension plan.
Reasons: Subsection 33(2) of the Interpretation Act provides that words in the singular include the plural and words in the plural include the singular.
XXXXXXXXXX
2015-058290
D. Wurtele
May 28, 2015
Dear XXXXXXXXXX:
Re: 149(1)(o.2) pension corporation
This is in reply to your email of April 22, 2015 in which you ask whether a related segregated fund trust that has only one beneficiary (which is a registered pension plan) is a permissible shareholder of a tax-exempt pension corporation pursuant to clause 149(1)(o.2)(iv)(C) of the Income Tax Act (the "Act"). Your question stems from the use of the plural in the phrase "all the beneficiaries of which" in that clause.
Our comments
This technical interpretation provides general comments about the provisions of the Act and related legislation (where referenced). It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination. The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R6, Advance Income Tax Rulings and Technical Interpretations.
Subsection 33(2) of the Interpretation Act provides that words in the singular include the plural and words in the plural include the singular. Thus, for the purpose of clause 149(1)(o.2)(iv)(C), the reference to a related segregated fund trust all the beneficiaries of which are registered pension plans can include a related segregated fund trust that has only one beneficiary, provided the beneficiary is a registered pension plan. The same position applies for the purpose of clause 149(1)(o.2)(iv)(B) of the Act and paragraphs 4802(1)(a) and (f) of the Income Tax Regulations, which contain similar language, provided the beneficiary is of the type listed in the applicable provision.
We trust our comments will be of assistance.
Yours truly,
Mary Pat Baldwin, CPA, CA
for Director
Financial Industries and Trusts Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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