9 May 2002 Internal T.I. 2001-010880A - RRSP FORFEITURE

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 CCRA.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.

Principal Issues:

Does an annuitant have to include amounts held in an RRSP that is forfeited to the Crown under Part XII.2 of the Criminal Code in his or her income?

Position: No.

Reasons:

There is no provision in the Act that would allow us to include the amounts in the annuitant's income.

								May 9, 2002

	HEADQUARTERS					HEADQUARTERS
	Assessment and Collections Branch		Income Tax Rulings
	Don A. Collins, Acting Director		   Directorate
	Accounts Receivable Division			M.P. Sarazin, CA
								957-2089
	Attention:  Shane Stevenson
	            Policy and Technical Services
								2001-010880

RRSP Forfeiture under the Criminal Code

This is in reply to your electronic mail of October 17, 2001, wherein you requested our views regarding the taxation of amounts held in a registered retirement savings plan ("RRSP") that are forfeited to the Crown under Part XII.2 of the Criminal Code.

You have asked whether the annuitant would be required to include the forfeited amounts in his or her income under subsection 146(8) or subsection 146(12) of the Income Tax Act (the "Act").

Comments

XXXXXXXXXX, we have concluded that, when an RRSP is forfeited to the Crown under Part XII.2 of the Criminal Code, the annuitant has not "received an amount" for the purposes of subsection 146(8) of the Act and the RRSP has not been "revised or amended" or "substituted for a new plan" for the purposes of subsection 146(12) of the Act. Consequently, the forfeited RRSP amounts would not be included in the annuitant's income.

For your information, a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the Legislation Access Database (LAD) on the Canada Customs and Revenue Agency's mainframe computer. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure, including information that could disclose the identity of the taxpayer. Should your client request a copy of this memorandum, they can be provided with the LAD version, or they may request a copy severed using the Privacy Act criteria, which does not remove client identity. Requests for this latter version should be made by you to Mrs. Jackie Page at (613) 994-2898. A copy will be sent to you for delivery to the client.

for Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Legislation Branch