12 January 1990 Income Tax Severed Letter AC58934 - Funeral Expense Benefit

5-8934
                                  J.D. Jones
                                  (613) 957-2104

Dear Sirs:

Re: Funeral Expense Benefit

This is in reply to your letter of October 20, 1989, wherein you requested our opinion on whether a funeral expense benefit would be permitted under a Health and Welfare Trust.

24(1)

In order for a particular benefit to be permitted under a Health and Welfare Trust, the benefit program must be limited to those described in paragraph 1(a) to (d) in IT-85R2 , it is our view that this benefit could not be included as a benefit under a Health and Welfare Trust without causing the trust to become an employee benefit plan or employee trust as the comments contained in paragraph 3 of IT-85R2 indicate. We enclose a copy of IT-502 on the subject of employee benefit plans and employee trusts.

We trust our comments are of assistance to you.

Yours truly,

for Director Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch