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.
Principal Issues:
Whether there is an advantage under 146(2)(c.4) where there is a payment by a financial institution into a taxpayer's RRSP as a reimbursement of administration fees charged to a registered plan in respect of the transfer of assets from the registered plan to the RRSP issued by the financial institution?
Position TAKEN:
No
Reasons FOR POSITION TAKEN:
Payment into a RRSP is not an advantage under 146(2)(c.4). See A-0709 and 5-940485.
5-943329
XXXXXXXXXX Robert Gagnon
Attention: XXXXXXXXXX
February 17, 1995
Dear Sirs:
Re: RRSP
This is in reply to your letter of November 1, 1994 addressed to the Registered Plans Division wherein you requested the approval of Revenue Canada, Taxation with respect to your proposal to reimburse administration fees charged to registered plans for the transfer of assets from the registered plans to registered retirement savings plans ("RRSP"). Your request has been forwarded to the Rulings Directorate for reply.
The Department does not give his approval with respect to such proposed transaction. However, the Department can give written confirmation of the tax implications (which are a source of concern for you) inherent in particular proposed transactions where the transactions are the subject matter of an advance ruling request. An advance ruling request must be submitted in the manner set out in Information Circular 70-6R2. While we are unable to comment on the income tax consequences attendant on the specific facts described in your letter, the following general comments may be of assistance to you.
It is our view that the payment by a financial institution into a taxpayer's RRSP as a reimbursement of administration fees charged to a RRSP, deferred-profit sharing plan, registered pension plan or registered retirement income fund of the taxpayer in respect of the transfer of assets from the registered plan to the RRSP issued by the financial institution, is not an advantage for the purposes of paragraph 146(2)(c.4) of the Income Tax Act ("Act"). Accordingly, the payment would not violate the condition for the registration of RRSPs provided in paragraph 146(2)(c.4) of the Act.
The foregoing opinion is not a ruling and, in accordance with the guidelines set out in Information Circular 70-6R2 dated September 28, 1990, is not binding on the Department.
We trust our comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Rulings Directorate
Policy and Legislation Branch
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