23 December 1998 Internal T.I. E9826207 - R&D POOL

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: can it be said that an amount in a R&D tax pool is eligible property

for purposes of a section 85 roll?

Position: No.

Reasons: Simply an amount that results from a provision of the Act that allows a

particular deduction.

		December 23, 1998

	Winnipeg T.S.O.	Headquarters
	Workload Development	Partnerships Section
S. Tevlin
	Attention:  Michael Luzney
		982620

We are writing in response to your memorandum dated October 6, 1998 with respect to certain questions raised by a Winnipeg accountant with regard to section 85 of the Income Tax Act (the “Act”).

In particular, the accountant asked if a research and development tax pool (the “R&D Pool”) would be eligible to be transferred pursuant to subsection 85(1) of the Act.

In this regard we offer the following general comments.

It is our view that the R&D Pool would not constitute eligible property, within the meaning assigned by subsection 85(1.1) of the Act, since it is not a property described therein. The R&D Pool is simply a result of a provision of the Act that permits a taxpayer to deduct certain expenditures.

We trust our comments will be of assistance to you.

for Director
Resources, Partnerships and Trusts Division
Income Tax Rulings and Interpretations Directorate
Policy and Legislation Branch