9 April 2001 External T.I. 2001-0073985 - COMBINE SPOUSAL AND NON-SPOUSAL 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.

Reasons: The Act provides for the transfer of property between plans with the same annuitant but the combined plan becomes a spousal plan.

XXXXXXXXXX 2001-007398

M. P. Sarazin, C.A.

April 9, 2001

Dear XXXXXXXXXX:

Re: Combine Spousal RRSP with Non-Spousal RRSP

This is in reply to your letter of March 1, 2001, requesting our comments regarding the combining of a regular registered retirement savings plan ("RRSP") with a spousal RRSP where both RRSPs have the same annuitant. Your wife would like to combine her RRSP plans for various reasons including the reduction of expenses associated with her RRSPs.

Comments

In your letter you have outlined what is an actual fact situation related to proposed transactions. As noted in Information Circular 70-6R4 (available at your local tax services office or on the internet at www.ccra-adrc.gc.ca/formspubs/menu-e.html), this directorate can only provide an opinion concerning the tax consequences associated with specific proposed transactions in the form of an advance income tax ruling. Consequently, we can only provide you with the following general comments.

The provisions of subsection 146(16) of the Income Tax Act (the "Act") allow for the transfer of property from an 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 Act and includes an RRSP

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

(b) that has received a payment out of or a transfer from an RRSP 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 does not 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 do not apply.

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

Yours truly,

Roberta Albert, C.A.

for Director
Financial Industries Division
Income Tax Rulings Directorate