| 24(1) | 5-901687 |
| A. Seidel | |
| (613) 957-8960 |
19(1)
September 26, 1990
Dear Sir:
This is in reply to your letter dated June 14 1990 with respect to "retirement compensation arrangement" ("RCA") as defined in subsection 248(1) of the Income Tax Act (the "Act").
As the situation described in your letter deals with completed transactions your queries with respect to the particular plan should be discussed with the appropriate District Taxation Office. We will however provide the following general comments with respect to RCA's.
Generally, a RCA is an arrangement under which an employer makes contributions to a custodian in connection with benefits that are to be, or which may be, received on retirement or loss of employment. The plan described in your letter appears to satisfy these criteria and therefore would he a RCA.
There is no provision in the Act pursuant to which a RCA is registered. It is the responsibility of the trustee of the RCA trust to file annual tax returns in respect of the trust and it is the employer's responsibility to remit the withholding tax required pursuant to Part XI.3 and paragraph 153(1)(p) of the Act. The employer would also be required to remit withholding tax for any contributions already made to the RCA. Pursuant to subsection 227(8.2) of the Act the amount required to be remitted by the employer is equal to the contributions already made to the RCA.
In the situation where a RCA is would up any amount receiver to the employer or another person which can reasonably by considered to have been received in respect of an office or employment of the employee is include in the income of the employee pursuant to paragraph 56(1)(x) of the Act. Any amount received by the employer in the year in the course of a business out of a RCA to which the employer has made contributions deductible under paragraph 20(1)(r) of the Act is included in the income of the employee reptant in paragraph 12 of the Act.
Whole we hope of comments are of assistant to you the cannot constitute an advance income tax ruling and therefore are not binding on the Department in respect of your specific situation.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate