| 19(1) | 5-9110 |
| W.C. Harding | |
| (613) 957-3499 | |
| December 5, 1989 |
Dear Sirs:
This is in reply to your letter of November 17, 1989 wherein you requested our comments with respect to the treatment under the Income Tax Act of a "pooled overflow" fund which was created as follows:
24(1)
We cannot give opinions or rulings with respect to the taxation of existing plans except where complete details of the plans are provided to the particular company's local District Taxation Office who may, at their discretion, refer the request to our office. While we cannot reply directly to your request, we note that plans of the nature described would generally be one of two types of employee savings plans depending upon the provisions of the arrangement. Type 1 plans occur where the employer payments to the fund are made at the employees' direction and Type 2 plans occur where the employer's contributions are constructively received by the employees at the time of contribution. The tax treatment of both types of plans is described in detail at paragraph 32 of the Department's Interpretation Bulletin IT-502. A copy of that bulletin is enclosed for your review.
We trust these comments are satisfactory to your needs.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate