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:
Are withdrawal fees charged by the RRSP administrator under the terms of the RRSP deducted in determining the amount that has to be included in the annuitant's income under subsection 146(8) of the Act?
Position: Yes.
Reasons:
The withdrawal fees are costs of the RRSP trust. The annuitant only has to include the amount received before withholding taxes in his or her income.
XXXXXXXXXX 2001-006740
M. P. Sarazin, CA
February 16, 2001
Dear XXXXXXXXXX:
Re: Registered Retirement Savings Plan Withdrawals
This is in reply to your letter of January 19, 2001, which was forwarded to us by our Edmonton Tax Services Office, requesting confirmation that a registered retirement savings plan ("RRSP") annuitant only has to include the amount received from his or her RRSP, before withholding taxes, in his or her income. Withdrawal fees paid to the RRSP administrator under the terms of the RRSP in respect of the cash payment would not be included in the amount reported in the annuitant's income in respect of the RRSP payment.
Where the terms of an RRSP provide that the RRSP administrator is entitled to withhold a fee from an amount withdrawn by an annuitant from his or her RRSP, the fee is considered an expense of the RRSP trust for providing the payment. Consequently, the amount received (the gross amount requested net of the RRSP administrator's fee) by the annuitant from the RRSP would be subjected to withholding taxes and would be included in his or her income for the taxation year under the provisions of subsection 146(8) of the Income Tax Act. The T4RSP should only reflect the cash payment to the annuitant out of the RRSP before withholding taxes.
We trust that the above comments will be of assistance.
Yours truly,
Roberta Albert, CA
for Director
Financial Industries Division
c.c. Natalie Loyer, Resource Officer
Edmonton Tax Services Office
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