Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Does a Care and Maintenance Fund established pursuant to the Cemeteries Act (Revised) (Ontario) qualify as a trust governed by an eligible funeral arrangement (as defined in subsection 148.1(1) of the Act)?
Position:
Yes, if the contribution limit of $15,000 per individual for funeral services is not exceeded.
Reasons:
The words "cemetery arrangements" in the definition of "funeral services" in subsection 148.1(1) were intended to include Care and Maintenance Funds and are broad enough to do so.
961822
XXXXXXXXXX C.R. Bowen
Attention: XXXXXXXXXX
June 4, 1996
Dear Sirs:
We are writing in reply to your letter dated May 22, 1996, wherein you requested our technical interpretation of whether a Care and Maintenance Fund, established pursuant to the Cemeteries Act (Revised) (Ontario) R.S.O. 1990, C.-4 (the "Cemeteries Act"), qualifies as a trust governed by an eligible funeral arrangement (assuming that the contribution limit is not exceeded).
Effective for 1993 and subsequent taxation years, no income tax is payable on the taxable income earned by a trust governed by an eligible funeral arrangement pursuant to paragraph 149(1)(s.1) of the Income Tax Act (the "Act"). The definition of an eligible funeral arrangement is contained in subsection 148.1(1) of the Act. It is our opinion that a trust established pursuant to the Cemeteries Act for the perpetual care and maintenance of a cemetery will be considered a trust governed by an eligible funeral arrangement if the contribution limit is not exceeded. Where contributions made in respect of an individual for the provision of funeral services (which include arrangements for the care and maintenance of a cemetery) exceed the $15,000 contribution limit contained in the definition of an eligible funeral arrangement, that definition will not be met.
Under proposed paragraph 204(3)(d) of the Income Tax Regulations, a trust governed by an eligible funeral arrangement will be exempt from filing a T3 trust income tax and information return, T3 Summary and T3 Supplementary (a "T3 Return"). Such a trust will only be required to file a T3 Return for its 1993 and subsequent taxation years if the proposed paragraph is not passed.
If a particular Care and Maintenance Fund that qualifies as a trust governed by an eligible funeral arrangement has paid income taxes as a result of filing a T3 Return for its 1993 or any subsequent taxation year, that trust should advise the Revenue Canada office where the T3 Return was filed of the trust's status and request a reassessment of the return(s) in order to obtain a refund of the income taxes paid.
XXXXXXXXXX Our comments are provided in accordance with paragraph 21 of Information Circular 70-6R2 dated September 28, 1990.
Yours truly,
for Director
Resources, Partnerships and
Trusts Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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