30 December 2002 External T.I. 2002-0180025 - MINIMUM PAYMENT FROM A RRIF

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:

When does a minimum amount have to commence to be paid from a RRIF?

Position:

In the calendar year following the year in which the RRIF is entered into.

Reasons: The definition of RIF in 146.3(1) of the Act is clear.

XXXXXXXXXX 2002-018002
P. Kohnen
December 30, 2002

Dear XXXXXXXXXX:

Re: Withdrawals from a RRIF

This is in reply to your facsimile submission of December 19, 2002, requesting our comments regarding the requirements for payment of minimum amounts from a registered retirement income fund ("RRIF").

Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request. Where the particular transactions are completed, the inquiry should be addressed to the relevant Tax Services Office. However, we are prepared to provide the following general comments, which may be of assistance.

Pursuant to the definition of a "retirement income fund" (a "RIF") in subsection 146.3(1) of the Income Tax Act (the "Act"), a registered retirement income Fund ("RRIF") must commence payment of a minimum amount not later than the first calendar year after the year in which the RRIF was entered into.

In accordance with paragraph 146(2)(b.3) of the Act, a registered retirement savings plan ("RRSP") may not accept a contribution (referred to as a "premium") after maturity. Pursuant to paragraph 146(2)(b.4) of the Act, an RRSP may not mature after the year in which the annuitant attains 69 years of age, which in your case, as you have noted in your submission, occurred in 2001. Pursuant to paragraph 146(16)(a) of the Act, a transfer from an RRSP to a RRIF may only occur if the RRSP has not yet matured. Accordingly, your RRSP property would have had to have been transferred to your RRIF not later than December 31, 2001.

As noted above, where a RRIF was entered into in 2001, the Income Tax Act imposes no requirement for the payment of a minimum amount in the 2001 calendar year, however, payment of the minimum amount must commence in the 2002 calendar year.

In reference to your question regarding the difference between a RIF and a RRIF, a RRIF is an arrangement that meets the definition of a RIF in subsection 146.3(1) of the Act (referred to above) and has been accepted for registration by the Canada Customs and Revenue Agency.

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

Yours truly,

Roberta Albert, CA
for Director
Financial Industries Division
Income Tax Rulings Directorate