Section 207.5

Subsection 207.5(1) - Definitions

Advantage

Administrative Policy

29 October 2013 External T.I. 2013-0501941E5 - RCA transitional rule

//www.parl.gc.ca/HousePublications/Publication.aspx?DocId=5765988&File=41">: Subsection 44(3) of Bill C-45 introduces anti-avoidance rules, s....

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5 October 2012 Roundtable, 2012-0453141C6 F - RCA, prohibited investment

Does the concept of "advantage" in s. 207.01(1) apply to a split-dollar arrangement where the RCA holds the cash surrender value of the insurance...

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Articles

Jillian Welch, "Retirement Compensation Arrangements: an Update on the Advantage Rule", Taxation of Executive Compensation and Retirement Special Pension Edition, Volume XVII, No. 3, 2013, p. 1074.

Targeting of loan-back structures (p. 1074)

The Department of Finance borrowed these rules as a mechanism to deal with certain so-called "loan...

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Paragraph (a)

Administrative Policy

16 September 2016 Internal T.I. 2013-0500581I7 - RCA advantage tax rules

In finding that the advantage tax in s. 207.62 applied where a specified beneficiary of an RCA assigned their rights to receive distributions from...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 207.62 - Subsection 207.62(2) - Paragraph 207.62(2)(a) FMV of pledging benefit equal to PV of interest savings 104

14 December 2015 External T.I. 2013-0499501E5 - RCA advantages-Life insurance policy held by an RCA

An RCA trust acquires and holds a universal life insurance policy on the life of the individual who is the sole specified beneficiary of the RCA....

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14 December 2015 External T.I. 2014-0544211E5 - RCA advs - Life insurance policy held by an RCA

2013-0481421C6 concerned an RCA holding a life insurance policy that provided more than a nominal death benefit where, after indicating that the...

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17 May 2013 Roundtable, 2013-0481421C6 - Transfer of life insurance policy to a retiree

A corporation is the owner and beneficiary of an insurance policy on the life of a senior executive officer, who is also a shareholder, which was...

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RCA Strip

Administrative Policy

15 May 2017 External T.I. 2015-0580461E5 F - Life insurance policy held in an RCA trust

CRA considered, respecting an RCA trust with an employee as its sole beneficiary, that its “holding of a life insurance policy with life...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 207.5 - Subsection 207.5(3) s. 207.7(2) refund might be generated where an RCA trust distributes a life insurance policy to its employee beneficiary 336

Refundable Tax

Administrative Policy

12 January 2015 External T.I. 2013-0511051E5 - Employer loan to RCA

A loan by the employer to the RCA, equal to the refundable tax balance, is used by the RCA will pay a lump-sum amount to an employee to terminate...

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22 March 2005 External T.I. 2005-0112081E5 F - Convention de retraite - lettre de crédit

The employer for an RCA trust contributed to it an amount equaling the fee payable by the trust to a financial institution for issuing a letter of...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 207.7 - Subsection 207.7(2) where LC used to secure RCA benefits and refundable tax generated on funding of LC fees, refundable tax not recoverable based on paying the benefits 386
Tax Topics - Income Tax Act - Section 207.5 - Subsection 207.5(2) election not available to custodian holding an LC 217

12 March 1996 Internal T.I. 9531287 - CONTRIBUTIONS TO RCA'S

Where an employer directly acquires a letter of credit from a bank for the benefit of its employees, it will be considered to have established a...

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28 June 1995 CTF Roundtable, 9508496 - NON-FUNDED SUPPLEMENTAL PENSION PLANS

"Where a trust governed by an RCA obtains an LOC [Letter of Credit] and, in addition to the fee charged by the bank to the trust, the employer...

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92 C.R. - Q.49

Where a registered pension plan has its registration revoked and thereby immediately becomes a retirement compensation arrangement, Part XI.3 tax...

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88 C.R. - Q.30

All contributions to a RCA, whether from the employer or the employee, are included.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 207.6 - Subsection 207.6(2) 30

Articles

Jim Kahane, Uros Karadzic, Simon Létourneau-Laroche, "A Fresh Look at Retirement Compensation Arrangement: A Flexible Vehicle for Retirement Planning", Canadian Tax Journal (2013) 61:2, 479 – 502.

Refund mechanics (p. 485)

When the employer makes a contribution to an RCA, one-half of the contribution must be remitted to the CRA [fn 22:...

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Manjit Singh, Jillian Welch, "Retirement Compensation Arrangements and the Prohibited Investment and Advantage Rules", Taxation of Executive Compensation and Retirement, Special Pension Edition, Volume XVI, No. 4, 2012, p. 1041: The article initially provides the following overview of the statutory scheme:

Generally, employers and employees are entitled to a deduction from income in respect of contributions they make to an RCA. [fn. 2: Paragraph...

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Paragraph (a)

Administrative Policy

2017 Ruling 2016-0655071R3 - Supplemental employee retirement plan

Background

Holdco (a taxable Canadian corporation) holds all the shares of Opco, as its only asset other than cash. Holdco’s common shares are...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 207.5 - Subsection 207.5(1) - Subject Property of a Retirement Compensation Arrangement no subject property created when sub with SERP obligations is wound-up 174

2018 Ruling 2017-0720901R3 - Use of a Surety Bond by RCA

Background (current LC structure)

The company maintains a non-registered supplemental employee retirement plan (the “SERP”), which is a...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(r) contributions (including re Pt XI.3 tax) for funding surety bond fees, currently deductible 224

Paragraph (b)

Administrative Policy

26 May 2009 External T.I. 2009-0316841E5 F - Convention de retraite, crédit d'impôt étranger

Regarding the deductibility of foreign tax paid on non-business income in computing income for purposes of the Part XI.3 tax on retirement...

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Locations of other summaries Wordcount
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 91

Paragraph (c)

Administrative Policy

18 May 2017 Roundtable, 2017-0692331C6 - CLHIA 2017 Q3 - RCAs

In connection with a supplemental executive retirement plan (the “Plan”), the Employer established a trust and made annual contributions to it...

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Specified Beneficiary

Articles

Manjit Singh, Jillian Welch, "Retirement Compensation Arrangements and the Prohibited Investment and Advantage Rules", Taxation of Executive Compensation and Retirement, Special Pension Edition, Volume XVI, No. 4, 2012, p. 1041, at 1042

The definition allows an RCA to have more than one specified beneficiary. Moreover, it appears that the phrase "had a significant interest in...

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Subject Property of a Retirement Compensation Arrangement

Administrative Policy

2017 Ruling 2016-0655071R3 - Supplemental employee retirement plan

Opco, which formerly had an active business, but now is inactive, is obligated to pay supplemental executive pension benefits to former executive...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 207.5 - Subsection 207.5(1) - Refundable Tax - Paragraph (a) the distribution to a non-resident parent of assets of a subsidiary that had SERP obligations and the assumption of such obligations did not create an RCA 508

Subsection 207.5(2) - Election

Administrative Policy

7 July 2014 External T.I. 2013-0511061E5 - Change in custodian of an RCA

Refundable tax builds up under a RCA trust where the retirement benefits are secured by way of a letter of credit held by the RCA trust. In order...

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22 March 2005 External T.I. 2005-0112081E5 F - Convention de retraite - lettre de crédit

The employer for an RCA trust contributed to it an amount equaling the fee payable by the trust to a financial institution for issuing a letter of...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 207.7 - Subsection 207.7(2) where LC used to secure RCA benefits and refundable tax generated on funding of LC fees, refundable tax not recoverable based on paying the benefits 386
Tax Topics - Income Tax Act - Section 207.5 - Subsection 207.5(1) - Refundable Tax use of letter of credit to secure RCA benefits 173

31 March 1995 External T.I. 9502955 - LETTER OF CREDIT-RCA

"Where all the property of a RCA has been distributed, the custodian may choose to apply subsection 207.5(2) of the Act. In such a situation,...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(n.3) cancellation of LC 79

31 January 1994 External T.I. 9336855 F - Closing Out RCA Refundable Tax Account

The proper method to obtain the balance of an RCA's refundable tax is to elect under s. 207.5(2) in the year the final distribution of property is...

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Subsection 207.5(3)

Administrative Policy

15 May 2017 External T.I. 2015-0580461E5 F - Life insurance policy held in an RCA trust

An RCA trust transfers of a life insurance policy held by it to the employee who is the sole beneficiary of the RCA trust. Could s. 207.5(2) be...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 207.5 - Subsection 207.5(1) - RCA Strip holding of life insurance policy could entail RCA strip 228