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:
Whether deduction limit for past service contributions to pension plan can be increased.
Position TAKEN:
Not unless taxpayer entered into agreement before March 28, 1988.
Reasons FOR POSITION TAKEN:
Wording of 147.2(4)(a) and (b).
XXXXXXXXXX 941076
May 25, 1994
Dear XXXXXXXXXX:
Re: Deduction for Pension Buy-Back of Past Service
This is in reply to your letter of April 18, 1994, in which you ask us to determine if there is any way to permit the above-noted deduction in excess of the amounts set by the Income Tax Act (unless as otherwise stated all references to this statute are to the Income Tax Act S.C. 1970-71-72, c. 63 as amended, consolidated to June 10, 1993 - the "Act"). You filed a Notice of Objection with respect to your 1992 tax return and by letter dated April 12, 1994, the Appeals Division of the Montreal District Office confirmed that the assessment was correct. The Appeals Officer suggested that you write to us for an "administrative arrangement".
The Rulings Directorate does not provide administrative relief and we are sorry that we are unable to assist you in this respect. Although your district taxation office is responsible for replying to requests for administrative relief, to our knowledge such relief will not be granted in the circumstances described in your letter. The amount you may deduct for past service contributions to your registered pension plan is set by the Act and cannot be waived by the Department.
We note that there is a provision of the Act which was not described in the Appeals Division letter which may be applicable to your situation. If you entered into a written agreement before March 28, 1988, to make your past service contributions, then you may deduct up to $3500.00 each year in addition to any current service contributions you are making. The deduction is subject to a total maximum which is basically $3500 times the number of years of service to which these past service contributions relate. Please refer to page 10 of the enclosed RRSP's and Other Registered Plans for Retirement Guide and in particular to the box entitled "Deduction limit for your past-service contributions while not a contributor".
If this provision does not relate to your situation, there is no other relief available under the Act. As you suggest, you may wish to discuss your buy back arrangement with the appropriate officers of your employer. We trust the foregoing comments satisfactorily explain the Department's position.
Yours truly,
for Director
Financial Industries Division
Rulings Directorate
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1994
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1994