29 June 1990 Internal T.I. 7901287 F - Retirement Compensation Arrangement ("RCA")

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.

Subject:  Retirement Compensation Arrangement ("RCA")

24(1)

Attached is a copy of a referral from the Kitchener District Office concerning a taxpayer who claims to have inadvertently made a contribution to a "statutory arrangement" deemed to have been established on January 1, 1988 ("deemed RCA").

Technically, there is nothing in the legislation that provides for the correction requested by 24(1) nor could we find anything in our files to indicate that consideration was previously given to a similar situation.  From a technical viewpoint, our comments are as follows.

1.     By virtue of the coming-into-force provisions of the definition of a RCA in subsection 248(1) of the Act, the 24(1)

2.     By virtue of subsection 207.7(3) of the Act, a T3-RCA return should have been filed by 24(1)

3.     Unless the Plan provides otherwise, the amounts provided the beneficiaries 24(1) are deemed under subsection 50(13) of the Act to have been paid out of the deemed RCA.  The amounts would thus be included in income of the employee under paragraph 56(1)(x) of the Act rather than under paragraph 6(1)(g).

24(1)

With respect to the last sentence of 5 above, we wrote to you on May 4, 1989 (copy enclosed) suggesting that while technically speaking the T3-RCA return could not be filed before the end of the year, we would have no objection if the comments in the T3 Guide and Trust Return concerning the filing of a final return on the winding-up of a trust were considered to also apply to an RCA trust (see page 6 of the 1989 Guide).  If you are administering the T3-RCA returns in this manner, the refund referred to in 5 above could be obtained before the end of 1990.

Since 24(1) is awaiting the Department's response concerning the T3 returns that should be filed for the relevant years and since any agreement to their suggested course of action would be administrative in nature, we ask that you reply directly to the Kitchener District Office.  A copy of your reply for our files would be appreciated.

Director GeneralRulings Directorate