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: Are benefits received from an RRSP taxable when transferred to a charitable remainder trust?
Position: Yes.
Reasons: Subsection 146(8). No exceptions provided in this situation. The writer's comments relate to tax policy and thus he should write to the Department of Finance.
XXXXXXXXXX 990208
G. Kauppinen
June 29, 1999
Dear XXXXXXXXXX:
Re: Transfer of RRSP funds to a Charitable Remainder Trust ("CRT")
This is in reply to your letter dated January 26, 1999 wherein you requested our opinion as to whether amounts earned on accumulated contributions to an RRSP could be transferred, for no consideration, to a CRT without immediate adverse income tax consequences.
The Income Tax Act (the "Act") contains no provision to allow for a tax-free transfer from an RRSP to a CRT. Consequently, all such withdrawals from an RRSP (including the original principal and accumulated growth) would be considered benefits received from an RRSP by an annuitant and would be included in the annuitant's income for tax purposes in the year of receipt. However, a deduction in computing income taxes payable would be available to the transferor of assets to a CRT to the extent that the provisions of section 118.1 of the Act (i.e. charitable gifts) are applicable.
We suggest that you write to the Department of Finance since that Department is responsible for the consideration of tax policy issues of this nature.
We trust the foregoing comments are of assistance.
Yours truly,
Paul Lynch
for Director
Financial Industries Division
Income Tax Rulings
and Interpretations Directorate
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