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.
RULINGS DIRECTORATE
CORRESPONDENCE SUMMARY
DOCUMENT TYPE:
Opinion
Principal Issues:
Whether Department can adopt administrative position to permit registered plans to hold foreign currency outside Canada and not be subject to Part XI tax.
Position TAKEN:
No.
Reasons FOR POSITION TAKEN:
Because it's contrary to law.
LEGAL:
FINANCE OPINION:
JURISPRUDENCE:
RCT PUBLICATIONS:
IT-412, para 3(e).
HAA NUMBER:
7217-1
XXXXXXXXXX 940177
Attention: XXXXXXXXXX
February 24, 1994
Dear Sirs:
Re: Foreign Currency Held by Registered Pension Plan
This is in reply to your letter of January 19, 1994, in which you ask us to consider amending Interpretation Bulletin IT-412R to state that foreign currency held inside or outside Canada will not be considered foreign property (for purposes of Part XI of the Income Tax Act).
The definition of "foreign property" contained in subsection 206(1) of the Income Tax Act states that it means a number of properties including, in paragraph (c) of the definition, intangible property situated outside Canada.
The Department cannot take a position contrary to the law in this respect.
Although we recognize that registered plans receiving foreign currency can avoid the application of the tax if they transfer the funds to Canada before the end of the month, an across-the-board administrative position to ignore the holding of foreign currency, or any intangible property, outside Canada would not be proper in our view. We cannot refuse to administer a provision merely because it is possible that some taxpayers can order their affairs to avoid the application of the provision. If you believe the restriction on the holding by registered plans of foreign currency outside Canada is unwarranted, we suggest you contact the Tax Policy Branch of the Department of Finance with your views.
Yours truly,
for Director
Financial Industries Division
Rulings Directorate
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