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 a trust with a trust company incorporated under the laws of Canada or a province having been named as trustee with certain responsibilities and an individual also named as trustee with other responsibilities qualify as a pooled fund trust?
Position: No.
Reasons: The definition of pooled fund trust in subsection 5000(7) of the Regulations clearly requires that the trustee be a trust company incorporated under the laws of Canada or a province. If there is more than one trustee because trustee responsibilities have been subdivided, both such trustees should so qualify.
XXXXXXXXXX 990891
M. P. Sarazin
Attention: XXXXXXXXXX
May 31, 1999
Dear Sirs:
Re: Pooled Fund Trusts
This is in reply to your letter dated April 1, 1999, wherein you requested our comments regarding the requirement, under subsection 5000(7) of the Income Tax Regulations (the “Regulations”), that a pooled fund trust have a trust company as a trustee for all purposes.
It appears that the opinion you seek relates to specific proposed transactions and, therefore, we bring to your attention Information Circular 70-6R3 dated December 30, 1996, issued by Revenue Canada. Confirmation of tax consequences with respect to proposed transactions involving specific taxpayers will only be provided in response to a request for an advance income tax ruling. However, we can provide you with the following general comments.
The determination of whether a trust has a trustee which is a trust company incorporated under the laws of Canada or a province for purposes of the definition of “pooled fund trust” in subsection 5000(7) of the Regulations is a question of fact which can only be determined after a review of all of the relevant related to the particular trust arrangement. However, where a trust is established with two trustees (one a trust company incorporated under the laws of Canada or a province and the other an individual) having different responsibilities under the trust agreement, we are of the view that the trust would not be a trust the trustee of which is a trust company incorporated under the laws of Canada or a province because of the trustee responsibilities to be undertaken by an individual.
We trust these comments will be of assistance.
Yours truly,
Paul Lynch
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
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