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:
1. Can a retiring allowance be transferred to a RRIF under paragraph 60(j.1) (taxpayer is 78 years of age)? 2. Can a retiring allowance be paid to a retiring employee in respect of services to a corporation which is wound-up under subsection 88(1) immediately after the payment?
Position:
1.No. 2.Yes.
Reasons:
Paragraph 60(j.1) only allows rollovers to RPPs and unmatured RRSPs. Taxpayer is over 69 years of age and therefore cannot be the annuitant of an unmatured RRSP. 2. The wind-up of the subsidiary corporation, in and by itself, will not affect the characterization of the payment as a retiring allowance.
XXXXXXXXXX 2000-003311
G. Kauppinen
Attention: XXXXXXXXXX
September 5, 2000
Dear Sirs:
Re: Retiring Allowances
This is in reply to your letter dated June 15, 2000 regarding retiring allowances.
You have asked whether it is possible for a 78 year old taxpayer who receives a retiring allowance to transfer some or all of the retiring allowance to her RRSP/RRIF under the provisions of paragraph 60(j.1) of the Income Tax Act ("Act"). In reply, the answer is no. The provisions of paragraph 60(j.1) of the Act only apply to transfers to registered pension plans and un-matured RRSPs. Since the recipient of the retiring allowance is over the age of 69 she cannot be the annuitant of an un-matured RRSP.
You have also asked if the wind-up of a subsidiary corporation into its parent (we assume pursuant to the provisions of subsection 88(1) of the Act) would affect the availability of the provisions of section 60(j.1) of the Act to a retiring allowance received by a taxpayer immediately before the wind-up. In reply, the wind-up is of no consequence if the provisions of subsection 60(j.1) are otherwise satisfied.
We trust our comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Legislation Branch
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 2000
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 2000
Email this Content