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26 May 2009 External T.I. 2009-0316841E5 F- Convention de retraite, crédit d'impôt étranger-- summary under Subsection 126(1) Summary Under Tax Topics- Income Tax Act- Section 126- Subsection 126(1) no foreign tax credit can be claimed for non-business income tax paid on income of RCA trust Before indicating that foreign tax paid on non-business income may be deductible under s. 20(11) or (12) in computing income for purposes of the Part XI.3 tax on retirement compensation arrangements, CRA stated: Pursuant to paragraph 149(1)(q.1), no Part I tax is payable on the taxable income of an RCA trust. ...

20 August 2008 External T.I. 2008-0288561E5 F- Convention de partage d'une société de personnes-- summary under Subsection 96(1.1) Summary Under Tax Topics- Income Tax Act- Section 96- Subsection 96(1.1) no income could be allocated under s. 96(1.1) where aggregate income was nil The partnership agreement for a services partnership provides that a partner who has withdrawn will be paid over five years an amount respecting work-in-progress and paid at a formula-based rate over five years, with the parties agreeing that such amounts be paid as income allocations under s. 96(1.1). ...

6 October 2006 Roundtable, 2006-0197151C6 F- Acquisition selon convention entre actionnaires-- summary under Subsection 70(9.2) Summary Under Tax Topics- Income Tax Act- Section 70- Subsection 70(9.2) children’s exercise of a right in a shareholders’ agreement to acquire farmco shares that is triggered on their father’s death would not be a consequence of his death A shareholders' agreement gives children the right to acquire the shares of a farm corporation for $1 after their father's death. ...

4 January 2006 Internal T.I. 2005-0115801I7 F- Convention de retraite-- summary under Retirement Compensation Arrangement Summary Under Tax Topics- Income Tax Act- Section 248- Subsection 248(1)- Retirement Compensation Arrangement arrangement was not an RCA because the benefits were not reasonable A closely-held corporation that was dividending out all the profits of its business also established a purported retirement compensation arrangement (RCA) trust for two employees who, indirectly, were the corporation’s two shareholders, and made contributions to the trust that were funded by loans from the trust. ...

4 January 2006 Internal T.I. 2005-0115801I7 F- Convention de retraite-- summary under Subsection 56(2) Summary Under Tax Topics- Income Tax Act- Section 56- Subsection 56(2) contributions to purported RCA that provided excessive benefits to employee/ultimate shareholders were included in the direct shareholders’ income under s. 56(2) A closely-held corporation that was dividending out all the profits of its business also established a purported retirement compensation arrangement (RCA) trust for two employees who, indirectly, were the corporation’s two shareholders, and made contributions to the trust that were funded by loans from the trust. ...

4 January 2006 Internal T.I. 2005-0115801I7 F- Convention de retraite-- summary under Salary Deferral Arrangement Summary Under Tax Topics- Income Tax Act- Section 248- Subsection 248(1)- Salary Deferral Arrangement contributions to a purported RCA that contemplated excessive benefits also were not in relation to an SDA because the contributions instead were indirect shareholder appropriations A closely-held corporation that was dividending out all the profits of its business also established a purported retirement compensation arrangement (RCA) trust for two employees (Mr. ...

15 September 2003 External T.I. 2003-0033405 F- CONVENTION DE RETRAITE INTERETS COURUS-- summary under Paragraph (b) Summary Under Tax Topics- Income Tax Act- Section 207.5- Subsection 207.5(1)- Refundable Tax- Paragraph (b) computation of refundable tax includes income under application of s. 12(9) to stripped coupons Where an RCA trust holds strip bonds and debentures with interest payable at maturity, should such interest income be recognized only at maturity in computing the "refundable tax" of the RCA. ...

16 October 2003 External T.I. 2003-0038315 F- CONVENTION DE RETRAITE-- summary under Paragraph 20(1)(c) Summary Under Tax Topics- Income Tax Act- Section 20- Subsection 20(1)- Paragraph 20(1)(c) reasonableness of interest rate determined re market interest rates An RCA trust created for the benefit of a managing shareholder and to which the employer contributed $100,000 lends the amount of the contribution, net of refundable taxes (i.e., $50,000), to the corporation. ...

14 January 2004 External T.I. 2003-0046131E5 F- Convention de retraite- dépositaire-- summary under Retirement Compensation Arrangement Summary Under Tax Topics- Income Tax Act- Section 248- Subsection 248(1)- Retirement Compensation Arrangement life insurance company can be a custodian Can a life insurance company carrying on business in Canada be a custodian as defined in the definition of "retirement compensation arrangement" (“RCA”)? ...

24 January 2005 External T.I. 2004-0099471E5 F- Convention de retraite pour un actionnaire-employé-- summary under Paragraph 20(1)(r) Summary Under Tax Topics- Income Tax Act- Section 20- Subsection 20(1)- Paragraph 20(1)(r) no deduction regarding pre-incorporation services, and longstanding CRA position re shareholder-manager compensation Are contributions by a corporation to an RCA deductible in computing its income where the contributions relate to services rendered by a shareholder-employee while self-employed and before the corporation’s incorporation? ...