8 February 2000 External T.I. 1999-0014175 - MERGE SPOUSAL REGULAR RRSP

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: Can a taxpayer combine his or her regular RRSP with his or her spousal RRSP?

Position: Yes but the combined plan becomes a spousal plan.

Reasons: The Act provides for the transfer of property between plans with the same annuitant.

XXXXXXXXXX 1999-001417
M. P. Sarazin
February 8, 2000

Dear XXXXXXXXXX:

Re: Combine Regular RRSP with Spousal RRSP

This is in response to your letter dated November 24, 1999, wherein you requested our comments regarding the combining of a regular registered retirement savings plan ("RRSP") with a spousal RRSP where both RRSPs have the same annuitant. You would like to combine your plans for various reasons including the reduction of expenses associated with the RRSPs.

Comments

The provisions of subsection 146(16) of the Income Tax Act (the Act") allow for the transfer of property from a RRSP before the maturity of the plan to another RRSP under which the transferor is the annuitant. Therefore, where an annuitant under a spousal RRSP is also the annuitant under a non-spousal RRSP, the transfer of property between the two RRSPs is allowed under the Act.

A "spousal plan" is defined in subsection 146(1) of the Income Tax Act (the "Act") and includes

(a) a registered retirement savings plan

(i) to which the taxpayer has, at a time when the taxpayer's spouse was the annuitant under the plan, paid a premium, or

(ii) that has received a payment out of or a transfer from a registered retirement savings plan or a registered retirement income fund that was a spousal plan in relation to the taxpayer.

Since a spousal plan includes any RRSP that has received property as a result of a transfer from a spousal plan, any transfer of property from a spousal plan to a non-spousal plan will result in the transferee plan becoming a spousal plan for purposes of the Act. This would be the case whether or not the attribution rules for RRSPs in subsection 146(8.3) of the Act would apply. Note, however, that the designation of a plan as a spousal plan is irrelevant where subsection 146(8.3) of the Act cannot apply.

A form T2033 is used to record a direct transfer under paragraph 146(16)(a) of the Act and the instructions for the form require the disclosure of whether the property transferred is from a spousal plan. As noted above, the designation of the consolidated plan as a spousal plan is required but irrelevant where the attribution rules cannot apply.

We trust the above comments will be of assistance to you.

Yours truly,

Patricia Spice
for Director
Financial Industries Division
Income Tax Rulings Directorate