21 February 1997 External T.I. 9641315 - INVESTMENT MANAGEMENT FEES

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.

		964131
XXXXXXXXXX	M. Eisner

Attention: XXXXXXXXXX

February 21, 1997

Dear Sir or Madam:

Re: Investment Management Fees

This is in reply to your letter of December 2, 1996, concerning the above noted subject.

It is our understanding that your concern relates to an individual's entitlement to deduct investment management fees in respect of his or her investments. You have asked whether the expenses may be claimed by the individual's spouse.

In the above situation, only the individual owner of the investments would be entitled to claim investment counsel fees. They are deductible to the extent provided under paragraph 20(1)(bb) of the Income Tax Act in computing his or her income for a taxation year from business or property. Such fees must be reasonable in the circumstances.

For you general information, we are enclosing a copy of Interpretation Bulletin IT-238R2 which discusses the deductibility of investment counsel fees.

We trust our comments will be of assistance to you but caution that they do not constitute an advance income tax ruling and, accordingly, are not binding on the Department with respect to any particular transaction.

Yours truly,

John F. Oulton
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch