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.
Principal Issues:
XXXXXXXXXX
Position:
XXXXXXXXXX
Reasons:
In accordance with ATR-24
XXXXXXXXXX
Attention: XXXXXXXXXX
Dear Sirs:
Re: Advance Income Tax Ruling
XXXXXXXXXX
Statement of Facts
The following terms have the meanings specified:
- Unless otherwise indicated, all references to statute are to the Income Tax Act (Canada) (the "Act");
- "Canadian corporation", "public corporation" and "taxable Canadian corporation" have the meanings assigned by subsection 89(1) of the Act;
- "annuitant" and "registered retirement savings plan" ("RRSP") have the meanings assigned by subsection 146(1) of the Act;
- "registered retirement income fund" ("RRIF") has the meaning assigned by subsection 146.3(1) of the Act.
- XXXXXXXXXX is a taxable Canadian corporation. XXXXXXXXXX is wholly-owned, XXXXXXXXXX, by XXXXXXXXXX is a public corporation and a taxable Canadian corporation.
- XXXXXXXXXX
- In XXXXXXXXXX as a complement to its non-contributory defined benefit registered pension plan, XXXXXXXXXX introduced a Voluntary Supplemental Pension Plan (the "VSPP") to enable employees to contribute (within limits) towards their retirement income. The VSPP qualified as a money purchase registered pension plan for purposes of paragraph 8(1)(m) of the Act as it existed at that time.
- Participation in the VSPP was entirely voluntary.
- The Administrator of the VSPP was XXXXXXXXXX
- XXXXXXXXXX did not make any contributions to the VSPP. Expenses of administering the VSPP (i.e., the fees and expenses of the administrators) were borne by XXXXXXXXXX
- The VSPP was cancelled in XXXXXXXXXX as a result of changes to the Act regarding tax assisted retirement savings and was replaced with the XXXXXXXXXX (the "Group RRSP").
- Funds within the VSPP were transferred to the Group RRSP on a tax-deferred basis pursuant to the provisions of the Act as it existed at that time following enrolment in the Group RRSP by the member of the VSPP.
- XXXXXXXXXX Following the transfer to the Group RRSP, the employees/retirees were able to transfer or withdraw funds out of the Group RRSP.
- Group RRSP funds were invested by XXXXXXXXXX in general deposit accounts of the respective administrators, earning interest at the average rate quoted on the last day of the month by XXXXXXXXXX Interest earned on a general deposit account each month, and maturing principal at the end of each XXXXXXXXXX term, were reinvested in similar XXXXXXXXXX general deposit accounts.
- Except for fees associated with potential withdrawals or transfers by the members, all administrative expenses which related to the management of the Group RRSP were paid by XXXXXXXXXX
- XXXXXXXXXX
Proposed Transactions
The understanding that has been reached by XXXXXXXXXX
Purpose of the Proposed Transactions
XXXXXXXXXX
Rulings Given
Provided that the above statement of facts and proposed transactions are accurate and constitute complete disclosure of all relevant facts and proposed transactions and the proposed transactions are carried out as described above, our Rulings are as follows:
A XXXXXXXXXX
B XXXXXXXXXX
C XXXXXXXXXX
D XXXXXXXXXX
The above rulings are given subject to the general limitations and qualifications set out in Information Circular 70-6R2 dated September 28, 1990, as amended by Special Release dated September 30, 1992, issued by Revenue Canada and are binding provided that the proposed definitive agreement is entered into and is effective on or before XXXXXXXXXX.
These rulings are based on the Act and the Regulations as of the date of this ruling letter without taking into account any future amendments thereto, whether currently proposed or not.
XXXXXXXXXX
XXXXXXXXXX
Yours truly
for Director
Financial Industries Division
Income Tax Rulings and Interpretations Directorate
Policy and Legislation Branch
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© Her Majesty the Queen in Right of Canada, 1996
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© Sa Majesté la Reine du Chef du Canada, 1996