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: With the introduction of the Department's new position on RRSP/RRIF fees, would the reimbursement of fees by the annuitant to the plan have any negative tax implications?
Position: Generally, we would view the reimbursement as a contribution.
Reasons: Application of our administrative position.
XXXXXXXXXX 5-980690
Fouad Daaboul
Attention: XXXXXXXXXX
July 2, 1998
Dear Sirs:
Re: RRSP and RRIF fees
We are writing in response to your letter of March 17, 1998, wherein you requested some clarification on the retroactive application of our new position of February 23, 1998, dealing with the registered retirement savings plan or registered retirement income fund (the "Plan") fees. In particular, where a trustee was and will be required to charge a Plan for fees, will the annuitant under the Plan have any negative tax implications if he or she reimburses the Plan for those fees?
It is the Department's current position that management, investment counsel and administration fees (the "Fees") of a plan can be paid by the trust governed by such a Plan without any income inclusion or paid by the annuitant with no deduction.
Where the Plan provides that the Fees will be paid to the trustee whether by the trust's properties or by the annuitant, it would be a question of fact and law as to whether a payment made by the annuitant to the Plan is considered to be a contribution or a reimbursement of the Fees. Generally, it is our view that, if at the time the fees were paid, it was intended that they be paid from the plan and it was subsequently decided to reimburse the fees, the reimbursement would constitute a contribution to the plan.
We trust our comments will be of assistance to you.
Yours truly,
Paul Lynch
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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