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:
Is a transfer of funds to another financial institution subject to 148.1(3)
Position:
no
Reasons:
taxpayer never receives the funds
951443
XXXXXXXXXX G. Kauppinen
(613) 957-4363
Attention: XXXXXXXXXX
June 5, 1995
Dear Sirs:
Re: Bill C-70: Draft Section 148.1
Eligible Funeral Arrangements
This is in reply to your facsimile transmissions dated May 29 and 30, 1995.
You have described a situation where the "custodian" (as defined in proposed subsection 148.1(1) of Bill C-70) wishes to transfer amounts contributed by taxpayers in respect of eligible funeral arrangements (and income accrued thereon) from one financial institution to another.
You have asked our opinion as to whether the following authorization, by a taxpayer who has entered into an eligible funeral arrangement with a custodian, to withdraw and redeposit funds, could cause an income inclusion to that taxpayer:
...In order to facilitate administration of the trust account by (the custodian), I hereby request that you close my account and remit all monies accrued in the account, to (the custodian) in trust.
I understand that (the custodian) will then redeposit all monies in a trust account with (another financial institution) and will honour and be bound by the original contract signed by both parties on................
Dated at....................on the.......of.................1995
Purchaser.............................
Custodian.............................
In our opinion the withdrawal and redeposit of funds in the manner described above would not constitute a distribution to a taxpayer who has entered into an eligible funeral arrangement with a custodian pursuant to draft subsection 148.1(3) (assuming it becomes law as it currently reads). Consequently there would be no amount added in computing such taxpayer's income pursuant to that subsection.
We trust the foregoing is of assistance. However, as mentioned in paragraph 22 of Information Circular 70-6R2, the above comments constitute an expression of opinion only and are not binding on Revenue Canada.
Yours truly,
for Director
Manufacturing Industries,
Partnerships and Trusts Division
Income Tax Rulings and Interpretations Directorate
Policy and Legislation Branch
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