27 June 2003 External T.I. 2003-0009055 - FRATERNAL BENEFIT SOCIETY

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 CCRA.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.

Principal Issues: Is the trust exempt from tax pursuant to paragraph 149(1)(k) of the Act as a "benevolent or fraternal benefit society or order"?

Position: No.

Reasons: The trust is likely a retirement compensation arrangement.

XXXXXXXXXX A. Seidel
(613) 957-2058
2003-000905
June 27, 2003

Dear Sir:

Re: Benevolent or Fraternal Benefit Society or Order

We are writing in response to your letters dated January 13 and February 28, 2003, which were addressed to the XXXXXXXXXX Tax Services Office and forwarded for our comments on the application of paragraph 149(1)(k) of the Income Tax Act (the "Act") to a specific trust.

As discussed in our telephone conversation (XXXXXXXXXX/Seidel), it is our view that the trust described in your two letters would not qualify as "a benevolent or fraternal benefit society or order" as described in paragraph 149(1)(k) of the Act. The trust would also not qualify as a health and welfare trust, as described in Interpretation Bulletin IT-85R2, since the plan for the retirees is not administered by the "employer".

We have attached, for your information, a copy of our response to the XXXXXXXXXX Tax Services Office. If you wish to discuss any of the above further, or if we can be of any further assistance, do not hesitate to contact us at the above number.

Yours truly,

John Oulton, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch