13 February 2001 External T.I. 2001-0064815 - RRSP, non-resident annuitant

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:

Is an RRSP with a non-resident annuitant treated differently than an RRSP with a resident annuitant?

Position: No.

Reasons:

The Act does not restrict the activities of RRSPs with non-resident annuitants.

XXXXXXXXXX 		2001-006481
M. P. Sarazin, CA
February 13, 2001

Dear Madam:

Re: Investments Held by RRSP with a Non-Resident Annuitant

This is in reply to your e-Mail of January 9, 2001, requesting clarification of the restrictions contained in the Income Tax Act (the "Act") disallowing a registered retirement savings plan ("RRSP") with a non-resident annuitant from acquiring qualified investments.

You are of the view that the residency of the annuitant under an RRSP should not affect the investments that may be acquired by the RRSP and that an RRSP may acquire any qualified investment, within the meaning assigned by subsection 146(1) of the Act.

Comments

In your letter you have outlined what appears to be an actual fact situation related to completed transactions. We must advise you that the review of completed transactions falls within the responsibility of tax services offices which, in the case of non-residents, is the International Tax Services Office. However, we can provide you with the following general comments.

We note that there is no provision in the Act that restricts the investment activities of an RRSP with a non-resident annuitant. An RRSP with a resident annuitant and an RRSP with a non-resident annuitant can acquire the same qualified investments.

Under subsection 146(4) and paragraph 149(1)(r) of the Act, an RRSP is generally exempt from taxes under Part I of the Act. Where an RRSP has borrowed money or carries on a business, it will be taxable in that year. Consequently, an RRSP should not have to pay taxes on its interest income or on its capital gains unless it has borrowed money or it carries on a business.

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

Yours truly,

Roberta Albert, CA
for Director
Financial Industries Division