2 April 2003 External T.I. 2003-0004785 - RRSP TRANSFER ON MARRIAGE BREAKDOWN

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 a T2220 for an RRSP transfer on marriage breakdown have to be filed?

Position: No.

Reasons:

Issuer of the transferor RRSP must issue a T4RSP to the transferor with the amount transferred in Box 35 and the S.I.N. of the annuitant of the recipient RRSP in Box 36. Form T2220 must also be completed but is retained by the issuer.

XXXXXXXXXX 			2003-000478
G. Kauppinen
April 2, 2003

Dear XXXXXXXXXX:

Re: Form T2220 - Transfer of RRSP on Marriage Breakdown

We are writing in reply to your undated letter which was forwarded to us for reply by the Surrey Tax Centre regarding transfers between RRSPs on a breakdown of a marriage or common-law partnership.

Written confirmation of the consequences inherent in particular transactions are given by this directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5, issued by the Canada Customs and Revenue Agency ("CCRA"). Where the particular transactions are partially completed or completed, the enquiry should be sent to the relevant Tax Services Office. However, we are providing the following comments which are of a general nature. These comments do not constitute an advance income tax ruling and accordingly are not binding on the CCRA.

Under paragraph 146(16)(b) of the Income Tax Act ("Act"), if an amount is transferred directly from your RRSP to your spouse's or former spouse's (or former common-law partner's) RRSP due to a breakdown in your relationship, the amount transferred will not be included in your income for tax purposes nor will it be deductible to the recipient (i.e. the annuitant of the RRSP receiving the funds).

In order to get this "rollover" treatment, Form T2220 must be completed. This form is not filed with us but is kept on file by the issuer (trustee) of your RRSP as a record of the transfer.

Also, the transfer of funds must be directly from your RRSP to your spouse's, former spouse's or former common-law partner's RRSP. In addition, the transferor annuitant and the recipient annuitant must be living separate and apart and the transfer from one RRSP to the other RRSP must be made under a decree, order or judgment of a competent tribunal or under a written separation agreement in settlement of rights arising out of, or on the breakup of, the marriage or common-law partnership.

The issuer (trustee) of your RRSP must issue a T4RSP to you showing the amount transferred in Box 35 and the social insurance number of the annuitant of the recipient RRSP (i.e. your spouse or former spouse or common-law partner) in Box 36.

We trust that these comments will be of assistance.

Yours truly,

Mickey Sarazin, C.A.

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