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.
XXXXXXXXXX
Attention: XXXXXXXXXX
Dear Sirs:
RE: Promotional Incentives For Registered Retirement Savings Plans
This is in reply to your letter of June 18, 1993, in which you describe three promotions and ask whether they would offend the provisions of paragraph 146(2)(c.4) of the Income Tax Act (the "Act").
As it appears that you are discussing a proposed transaction, we are unable to respond to your request unless it is submitted as an advance ruling request in accordance with the instructions contained in Information Circular 70-6R2. We can offer the following general comments, however.
The Department's position is that paragraph 146(2)(c.4) of the Act prevents the registration of a plan which extends to an annuitant an advantage such as bonus interest, gifts, or other rights, things or properties of value. Issuers are subject to the penalty contained in subsection 146(13.1) of the Act if they offer advantages to the annuitant or to a person who does not deal at arm's length with the annuitant. Advantages which remain in the plan (such as bonus interest earned on the plan's investments) are not considered to be granted to the annuitant, and therefore do not contravene the provision.
Although these comments are not binding on the Department, we trust they are helpful.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate
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© Her Majesty the Queen in Right of Canada, 1993
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© Sa Majesté la Reine du Chef du Canada, 1993
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