24 August 2001 External T.I. 2001-0096605 - ROLLOVER OF UNMATURED RRSP TO SPOUSE

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 property of an unmatured RRSP be transferred to an RRSP under which the spouse or common-law partner ("CLP") of the transferor is the annuitant?

Position:

Not unless they are living separate and the transfer is made under decree, order, judgment or written separation agreement in settlement of rights arising out of, or on breakdown of their marriage of common-law partnership.

Reasons:

Subsection 146(16) governs the transfer of property from an unmatured RRSP. Paragraph 146(16)(a) provides for a transfer to an RRSP under which the annuitant is also the annuitant under the transferor plan. Paragraph 146(16)(b) provides for a transfer to the RRSP of a spouse or CLP or former spouse or CLP, but only under the conditions outlined above (breakdown of marriage or common-law partnership).

XXXXXXXXXX 2001-009660
P. Kohnen
August 24, 2001

Dear XXXXXXXXXX:

Re: Rollover of an Unmatured Registered Retirement Savings Plan to Spouse

This is in reply to your letter of August 3, 2001, requesting our views regarding whether a taxpayer may rollover their unmatured registered retirement savings plan ("RRSP") to either the non-spousal or the spousal RRSPs under which the taxpayer's spouse is the annuitant.

Our Comments:

The term "spousal plan" is defined in subsection 146(1) of the Income Tax Act (the "Act"). An RRSP is a spousal plan if the spouse or common-law partner of the annuitant has paid a premium under the plan, or if the RRSP has received a payment or transfer of property from another spousal plan. An unmatured RRSP is an RRSP that has not yet started to pay a retirement income.

Subsection 146(16) of the Act allows for the transfer of amounts from an unmatured RRSP. Paragraph 146(16)(a) allows the annuitant of an unmatured RRSP to transfer property to another RRSP or a registered retirement income fund ("RRIF") under which the transferor is the annuitant, or to a registered pension plan for the benefit of the transferor.

Paragraph 146(16)(b) allows for the transfer of property from an unmatured RRSP to an RRSP or to a RRIF under which the spouse or common-law partner or the former spouse or common-law partner of the transferor is the annuitant. For such a transfer to meet the requirements of paragraph 146(16)(b), the transferor and his or her spouse or common-law partner or former spouse or common-law partner must be living separate and apart and the transfer must be made under a decree, order or judgment of a competent tribunal, or under a written separation agreement, relating to a division of property in settlement of rights arising out of, or on the breakdown of, their marriage or common-law partnership. There are no provisions in the Act other than paragraph 146(16)(b) which allow for the tax-deferred transfer of property from an unmatured RRSP of a taxpayer to an RRSP under which the spouse of the taxpayer is the annuitant.

We trust that the above comments are of assistance. Please do not hesitate to contact Phillip Kohnen at (613) 957-2093 should you require further information.

Yours truly,

Roberta Albert, C.A.

for Director
Financial Industries Division
Income Tax Rulings Directorate