| 5-921649 | |
| 24(1) | D. S. Delorey |
| (613) 957-8953 |
Attention: 19(1)
June 12, 1992
Dear Sirs:
This is in reply to your letter of May 27, 1992 concerning the proper method of closing out a retirement compensation arrangement ("RCA").
We agree with your comments that a method of closing out an RCA is to
(a) have the custodian distribute all the property (e.g., cash) of the trust,
(b) file an election under subsection 207.5(2) of the Income Tax Act, and
(c) claim a refund of the refundable tax on the trust's final T3-RCA.
The above method is explained on page 9 of the RCA Guide, a copy of which can be obtained from the District Taxation Office. As noted therein, any income (e.g., interest) earned between the time the refund referred to in (c) above is received and the time it is distributed to the beneficiaries would be income of the trust.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate