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: Will we extend our recent change in position re the payment of management fees related to an RRSP or RRIF to allow an annuitant’s spouse to pay such fees on behalf of the annuitant?
Position: No
Reasons: The Act is clear and there is no reason to extend our new administrative position.
XXXXXXXXXX 980958
M. P. Sarazin
Attention:XXXXXXXXXX
May 13, 1998
Dear Sirs:
Re: Management Fees Related to an RRSP/RRIF
This is in reply to your facsimile dated April 13, 1998, wherein you requested our opinion as to whether the Department’s new position with respect to the payment of management fees related to a registered retirement savings plan (“RRSP”) or a registered retirement income fund (“RRIF”) with funds from inside or outside of the RRSP or RRIF will also apply where an annuitant’s spouse pays the management fees related to the annuitant’s RRSP or RRIF.
The Department’s new position does not apply to amounts paid by the spouse of an annuitant in respect of expenses of the annuitant’s RRSP. In our view, such payments would constitute premiums as defined under subsection 146(1) of the Income Tax Act (the “Act”) for purposes of both section 146 and Part X.1. The payment of RRIF trust expenses by the annuitant’s spouse is prohibited by paragraph 146.3(2)(f) of the Act. If such a payment is made, in the year the payment is made there will be an income inclusion to the annuitant equal to the fair market value of the RRIF property pursuant to subsection 146.3(11) of the Act.
We trust our comments will be of assitance 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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