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.
933179
XXXXXXXXXX
C. R. Brown
(613) 957-8954
November 22, 1993
Dear Sir:
RE: Transfer of Prepaid Funeral Services
This is in reply to your letter of October 28, 1993 concerning the transfer of funds held in trust to provide for funeral services.
In particular, you are concerned with the situation in which a contributor will arrange with a funeral home to transfer the prepaid funeral arrangement directly to another funeral home. This may occur because the contributor has either moved, the present funeral home is going out of business or other reasons. In any event, the funds held in trust are to be transferred directly from funeral director to funeral director and the services and products to be rendered and provided by the new funeral director will be similar to those that would have been provided and rendered by the former funeral director.
In such cases the funds are either transferred directly in trust to the new funeral director under formal written instructions from the contributor or the contributor's representative. The funds are not available to the contributor or the contributor's representative. The funds will immediately be placed in trust by the new funeral director to provide for the funeral services.
In the above circumstances this Department does not consider that the contributor has received the accrued interest transferred with the funds and consequently, it is not required that the accrued interest be included in the contributor's income for the year as a result of the transfer.
We trust that these comments will be of assistance.for Director
Manufacturing Industries, Partnerships
and Trusts DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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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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