8 March 1994 External T.I. 9404855 - HAA 7255-1 rrsp benefits

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

RULINGS DIRECTORATE
CORRESPONDENCE SUMMARY

DOCUMENT TYPE:

Opinion file #E9404855

Principal Issues:

Is payment of RRSP trustee fees by a broker a prohibited advantage under paragraph 146(2)(c.4)

Position TAKEN:

Not if the fees are otherwise payable by the trust.

Reasons FOR POSITION TAKEN:

see E9204786
application of general position to new situation

LEGAL:

FINANCE OPINION:

JURISPRUDENCE:

RCT PUBLICATIONS:

HAA NUMBER: 7255-1

XXXXXXXXXX 5-940485

Attention: XXXXXXXXXX

March 8, 1994

Dear Sirs:

Re: Paragraph 146(2)(c.4) of the Income Tax Act (the "Act")

This is in reply to your letter of February 24, 1994, concerning the waiving of certain Registered Retirement Savings Plan ("RRSP") administration fees and the payment of RRSP trustee fees.

Since the subject of your enquiry relates to a factual proposal, we are unable to provide you with any specific comments at this time. Confirmations of the tax implications in particular situations may only be provided by this Directorate where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in the Department's Information Circular 70-6R2.

While we are unable to address your specific situation, we can offer the following general comments on this topic.

The provision of administrative or investment services in respect of an RRSP is excluded as a prohibited advantage pursuant to subparagraph 146(2)(c.4)(iv) of the Act. Accordingly, the waiving of administration fees does not violate paragraph 146(2)(c.4) of the Act.

Where the provisions of an RRSP provide that the RRSP trustee's fees will be paid out of the trust property, the payment of those fees by a third party would constitute an advantage to the RRSP trust and not to the RRSP annuitant. Accordingly, the payment would not violate paragraph 146(2)(c.4) of the Act.

The above comments are based on our understanding of the law as it applies in general and may or may not apply to the circumstances of a particular case. They do not form an advance income tax ruling and they are not binding on the Department.

Yours truly,

for Director
Financial Industries Division
Rulings Directorate