CRA notes the absence of rollover treatment when an annuity is purchased out of a foreign pension plan

S. 147.4(1) effectively provides a rollover where an individual acquires ownership of an annuity contract in satisfaction of the individual’s entitlement to benefits under a registered pension plan. However, s. 147.4(1) does not apply to annuities purchased from foreign pension plans, so that a retiree - whose former non-resident employer determined to wind-up a foreign pension plan by using funds in the plan to purchase annuity contracts for each retired member – was required under s. 56(1)(a)(i) to include the full fair market value of the annuity in income in the wind-up year.

Neal Armstrong. Summary of 12 September 2019 External T.I. 2019-0802301E5 under s. 56(1)(a)(i).