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 fact that pooled fund trust is also a "master trust" makes units or interests in such a trust "foreign property".
Position:
In order not to be foreign property must satisfy one of the conditions in Reg. 5000 respecting pooled fund trust & master trust.
Reasons:
"Pooled fund trust" is prescribed not to be a "foreign property" if it meets conditions in 5000(1)(d) or (e); interest in "master trust" prescribed not to be foreign if condition in 5000(1.2)(a) or (b) met. Only one of the 4 conditions need be met.
XXXXXXXXXX 963760
Attention: XXXXXXXXXX
November 14, 1996
Re: Interest in Pooled Fund Trust
This is in reply to your facsimile transmission of November 8, 1996, in which you refer to a "pooled fund trust" as defined in subsection 5000(7) of the Income Tax Regulations (the "Regulations"), which pooled fund trust is a "master trust" as described in paragraph 149(1)(o.4) of the Income Tax Act (the "Act"). You ask us to confirm that an interest in such a pooled fund trust would not be a "foreign property" as defined in subsection 206(1) of the Act. For purposes of this letter we assume that at all times the pooled fund trust complies with the condition in paragraph 5000(1)(e) of the Regulations.
It is our view that an interest in such a "pooled fund trust" will not be foreign property as defined in paragraph 206(1)(i) of the Act regardless of the trust's status as a master trust under the Act. In other words, even though neither condition in subsection 5000(1.2) of the Regulations is satisfied, the interest is still prescribed not to be a foreign property in accordance with subsection 5000(1) of the Regulations.
Although the foregoing comments are not binding on the Department, we trust they assist.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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