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 an investment which has no value be transferred out of an RRSP with no income tax consequence?
Position: Yes.
Reasons: Subsection 146(9)
XXXXXXXXXX 2001-009349
G. Kauppinen
August 24, 2001
Dear XXXXXXXXXX:
Re: Transfer of Asset with No Value from Registered Retirement Savings Plan ("RRSP")
This is in reply to your facsimile transmission dated July 18, 2001 regarding the transfer of an investment which has no value from your RRSP into your name personally.
Such a transfer can be done and will be considered to be a sale of the asset from your RRSP to you personally. Subsection 146(9) of the Income Tax Act states that if an asset is transferred from an RRSP for consideration which is less than the fair market value of the property at the time of the transfer, or for no consideration, the difference between the fair market value of the property and the consideration, if any, shall be included in computing the income of the annuitant of the RRSP.
Therefore, if a property is transferred from your RRSP into your name personally for no consideration, there will be no income tax consequence as long as the fair market value of the property was nil at the time of the transfer. The value of the property at any time is a question of fact.
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
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