10 February 1997 External T.I. 9703335 - ANNUITANT'S INV COUNSEL FEES

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.

	                          	970333
XXXXXXXXXX	                             	M.P. Sarazin

Attention: XXXXXXXXXX

February 10, 1997

Dear Sirs:

Re: Investment Counsel Fees for Advice Provided to Annuitant

We are writing to advise you that we have reconsidered our previous position relating to the payment of investment counsel fees for advice provided to an annuitant of a self-directed registered retirement savings plan ("RRSP").

The determination of whether investment counsel fees or a portion thereof would be considered expenses of a RRSP trust is a question of fact that can only be determined after a review of all the facts pertaining to each particular situation. However, when an annuitant of an RRSP trust enters into a contract with a person for advice on the purchasing and selling of investments of the trust (i.e. the contract is between the annuitant and the person), it is the Department's position that the fees for such advice are an obligation of the annuitant and not of the RRSP trust. We have reconsidered our previous position with respect to the payment of such fees by the annuitant outside of the RRSP and we are now of the view that the payment of such fees by the annuitant would not be considered a premium or gift contributed to the RRSP.

Our revised position differs from the position expressed in a technical interpretation issued to you in 1993 (file #923477 dated March 2, 1993). We trust the above comments will be of assistance to you.

Yours truly,

for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch