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:
Is a locked-in LIRA that is registered as an RRSP for purposes of the Act subject to Part XI taxes on excess foreign property?
Position: Yes.
Reasons:
An RRSP is a taxpayer referred to in section 205 and it is subjected to taxes under Part XI of the Act.
XXXXXXXXXX 2001-006699
M. P. Sarazin, CA
February 13, 2001
Dear XXXXXXXXXX:
Re: Self-Directed LIRA and Part XI Taxes
This is in reply to your letter of December 26, 2000, requesting our views regarding the application of Part XI of the Income Tax Act (the "Act") to your self-directed locked-in retirement account ("LIRA") which holds excess foreign property.
In your letter you have outlined an actual fact situation related to completed transactions. As noted in Information Circular 70-6R4 (available at your local tax services office or on the internet at www.ccra-adrc.gc.ca/formspubs/menu-e.html), this directorate can only provide advance income tax rulings in respect of specific proposed transactions. We must advise you that the review of completed transactions falls within the responsibility of tax services offices. Consequently, we can only provide you with the following general comments.
The Canada Customs and Revenue Agency's general views regarding the application of Part XI of the Act are expressed in the enclosed Interpretation Bulletin IT-412R2 titled "Foreign property of registered plans". You will note that paragraph 1 of IT-412R2 discusses the computation of the Part XI taxes and paragraph 2 of IT-412R2 lists the taxpayers that are subjected to taxes under Part XI of the Act. A trust governed by a registered retirement savings plan ("RRSP") is listed in paragraph 2(b) as being a taxpayer that is subjected to Part XI taxes. Since a LIRA is generally registered as an RRSP, a LIRA would have to pay the taxes under Part XI of the Act.
We trust the above comments will be of assistance to you.
Yours truly,
Roberta Albert, CA
for Director
Financial Industries Division
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