Principal Issues: Tax treatment of lump-sum RRSP payments paid to residents of countries which have an income tax convention with Canada.
Position: - Where a convention refers to pensions but does not contain a definition for pension (i.e. for substantially all of Canada's conventions), lump-sum RRSP payments are pension payments but lump-sum RRSP payments are not periodic pension payments as defined section 5 of the ITCIA.
- Where a convention defines the term pension (currently only 5 conventions), it is necessary to look to the particular definition as to whether a lump-sum RRSP payment is a pension for purposes of that convention.
- Also, lump-sum RRSP payments are not considered to be "income from a trust" for the purposes of Canada's conventions.
Reasons: This is in line with the Department of Finance's views for such payments and is also supported by the Feb. 24, 1998 Notice of Ways and Means Motion to Amend the ITCIA.