Income Tax Severed Letters - 2020-09-23

Technical Interpretation - External

14 July 2020 External T.I. 2020-0843071E5 - TFSA - Deliberate Over-contributions

Unedited CRA Tags
Subsection 207.01(1) definitions of advantage, deliberate over-contribution, and excess TFSA amount; section 207.02; section 207.05; section 207.062
Summary Under
Tax Topics - Income Tax Act - Section 207.01 - Subsection 207.01(1) - Deliberate Over-Contribution
restrictive paraphrase provided of the deliberate over-contribution definition
Summary Under
Tax Topics - Income Tax Act - Section 207.02
no requirement to distribute income on a TFSA overcontribution where there has been 1% monthly tax but no advantage tax

Principal Issues: What are the tax consequences of making a deliberate over-contribution to a TFSA?

Position: 1% tax per month on the excess TFSA amount and 100% advantage tax on any income and capital gains attributable to the deliberate over-contribution (less the 1% tax payable).

Reasons: Application of the law.

29 April 2020 External T.I. 2020-0845211E5 - Pension income splitting

Unedited CRA Tags
60.03
Summary Under
Tax Topics - Income Tax Act - Section 60.03 - Subsection 60.03(2)
s. 60.03 permits transferring pension income to the higher-income spouse

Principal Issues: Whether eligible pension income can be allocated from the lower-income individual to the higher-income individual.

Position: Yes.

Reasons: Not precluded by pension income splitting rules in section 60.03.