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: Does Part XII.2 Tax apply to a double tier structure of pooled fund trusts ultimately owned by RPPs?
Position: Yes.
Reasons: paragraph (d) of the definition "designated beneficiary" in section 210 of the Act. Law is clear.
M. Lemire
XXXXXXXXXX (613) 957-4363
980955
Attention: XXXXXXXXXX
January 14, 1999
Dear Sirs:
Re: Part XII.2 Tax - Pooled Fund Trusts
We are writing in reply to your letter of April 8, 1998 in which you requested our opinion on the application of Part XII.2 of the Income Tax Act (the “Act”) in a three tier structure involving pooled fund trusts as provided in your letter. We apologize for the delay in responding to your letter.
We are not able to provide you with any specific comments other than by way of an advance tax ruling. The procedure for requesting an advance tax ruling is laid out in Information Circular 70-6R3 dated December 30, 1996. Nevertheless, we are prepared to provide some general comments.
Fact Situation
Registered pension plans own units of a pooled fund trust, as defined in subsection 5000(7) of the Income Tax Regulations, which in turn own units of other pooled fund trusts.
We agree with your analysis of the statutory provisions regarding the above situations. We also agree that the tax results were probably not intended by the Department of Finance.
Please note that this Department does not write or amend legislation. The function of Revenue Canada is to administer the laws as set out in the Act. The Department of Finance is responsible for the formulation of tax policy and for writing and considering amendments to existing legislation. As this issue appears to involve a matter of tax policy, we have taken liberty of informing the Department of Finance of this matter by forwarding a copy of this letter and yours dated April 8, 1998 for them to consider further.
Our comments are provided in accordance with paragraph 22 of Information Circular 70-6R3 dated December 30, 1996.
We trust our comments will be of assistance to you.
Theresa Murphy
Manager
Trusts Section
Resources, Partnerships and Trusts Division
Income Tax Rulings and Interpretations Directorate
Policy and Legislation Branch
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