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 RRSP trust may incur litigation costs to protect mortgage in default.
Position TAKEN:
Yes.
Reasons FOR POSITION TAKEN:
Extension of 2 routine opinions - costs relating to investments are costs of the trust; trust may protect investment in same manner as would reasonable investor.
XXXXXXXXXX 951752
Attention: XXXXXXXXXX
September 20, 1995
Dear Sirs:
Re: Expenses of Registered Retirement Savings Plan Trust
This is in reply to your letter of June 29, 1995, in which you ask whether legal fees resulting from litigation on a mortgage in default are expenses of the registered retirement savings plan (RRSP) trust which is the mortgagee/investor.
Fees relating to the investments of an RRSP are expenses of the RRSP trust. Such fees would include the costs of acquisition or transfer of investments, preparation of title documents, investment counselling, commissions, brokering, or the like.
Where litigation is necessary to protect an investment, the RRSP trust may engage in litigation to the same extent and in the same manner as would any reasonably prudent investor in the same circumstances. Legal costs incurred in such litigation are proper expenses of the RRSP trust.
Although the foregoing opinion is not binding on the Department, we trust these views are of assistance to you.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1995
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1995
Email this Content