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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? ...

24 January 2005 External T.I. 2004-0099471E5 F- Convention de retraite pour un actionnaire-employé-- summary under Section 67 Summary Under Tax Topics- Income Tax Act- Section 67 81 Roundtable position on shareholder-manager compensation also applies to RCA contributions 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? ...

2 February 2005 External T.I. 2004-0104671E5 F- Convention de retraite- Fonds mis de côté-- summary under Salary Deferral Arrangement Summary Under Tax Topics- Income Tax Act- Section 248- Subsection 248(1)- Salary Deferral Arrangement amounts agreed to be paid post-retirement do not create an SDA if they are not reasonably regarded as deferred salary In a general response to a query as to whether a special reserve fund that an employer creates by depositing money with a broker to provide for the payment of a portion of a pension payable for the retirement of a management employee will constitute a salary deferral arrangement or a retirement compensation arrangement, CRA stated: [W]here an employer agrees to pay amounts to an employee on or after retirement, and the amounts cannot reasonably be regarded as salary or wages that have been agreed to be deferred, the arrangement will generally not be regarded as a salary deferral arrangement. ...