28 January 2000 External T.I. 2000-0004385 - TRANSFER FROM RRSP TO RRIF

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: Proper reporting of transfers of property from RRSP to RRIF to RRSP

Position: Explained roll-over provision and referred issuer to tax centre.

Reasons: Improper reporting of amounts transferred and correction of notice of assessment must be handled through tax centre of either or both the annuitant and issuer.

XXXXXXXXXX 								2000-000438
P.  Spice
Attention: XXXXXXXXXX 

January 28, 2000

Re: XXXXXXXXXX

This is in reply to your letter received January 25, 2000, in which you advise that you and the above-named client were requested by your local tax services office to write to us to resolve issues arising from the assessment of the above-noted return.

Amendments to T1 returns or to T4RSP or T4RIF information returns or slips already filed or concerns about the assessment of taxes must be, depending on the filer's identity, handled through the individual's or your company's tax centre. While we cannot directly assist you or your client, we can provide the following general information concerning the tax implications of transferring property between registered retirement savings plans (RRSPs) and registered retirement income funds (RRIFs).

A LIRA or "locked-in retirement account" may be registered as an RRSP under the Act. A LIF of "life income fund" may be registered as a RRIF under the Act

Property may be transferred from an annuitant's unmatured RRSP (i.e., an RRSP that has not yet started to pay retirement income to the annuitant) to the same annuitant's RRIF in accordance with paragraph 146(16)(a) of the Act. As indicated in Appendix E to the T4RSP and T4RIF Guide such a transfer may be reported by the issuer on a Form T2033 (Direct Transfer Under Paragraph 146(16)(a) or 146.3(2)(e)) or in some other fashion which provides all the relevant information about the transfer. A transfer under paragraph 146(16)(a) of the Act takes place on a tax-deferred basis and there is therefore no requirement for the RRSP issuer to withhold tax or to issue a T4RSP slip. The annuitant is not required to include in income the amount of the property transferred to the RRIF.

As further explained in Appendix E to the T4RSP and T4RIF Guide an excess amount (i.e., the amount in excess of the "minimum amount" required to be paid from the RRIF for the year) may be directly transferred by the carrier from an annuitant's RRIF to an RRSP of the same annuitant and the transfer must be reported on a Form T2030 (Direct Transfer Under Subparagraph 60(l)(v)). The carrier must issue a T4RIF and an RRSP contribution receipt for the amount transferred. Therefore, the annuitant is required to include the amount in income on the T1 return and may claim a deduction under clause 60(l)(v)(D) of the Act for the amount transferred. However, no tax need be withheld by the carrier.

Any amount which is withdrawn from either an RRSP or a RRIF and paid to the annuitant must of course be reported on the proper information slip and reported as income by the annuitant for the year of withdrawal.

We trust this serves to explain the relevant provisions. All guides and forms published by the Canada Customs and Revenue Agency are available on the following website: http://www.ccra-adrc.gc.ca/formspubs/menu-e.html

Yours truly,

P. Spice
for Director
Financial Industries Division
Income Tax Rulings Directorate