22 December 1986 Income Tax Severed Letter 5-2380 - []

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.

XXXX R. Nanner (613) 957-8960

December 22, 1986

Dear Sirs:

Re: Subsection 146(5) of the Income Tax Act (the "Act") Registered Retirement Savings Plan ("RRSP") Premium Deductible

This is in reply to your letter of October 23, 1986 wherein you asked for our comments on a specific actual situation.

We are unable to give an opinion on the factual situation described in your letter since it is a completed transaction. Your specific request should be directed to your local District Taxation Office. We are, however, prepared to make the following general comments.

It is our view that when an employee terminates his employment and is no longer entitled to pension benefits (after his own contributions to a pension plan plus interest are refunded to him) and neither his employer nor himself has made a contribution to a deferred profit sharing plan in the year then his contribution limit to a RRSP for the year will be established pursuant to paragraph 146(5)(b) of the Income Tax Act (the "Act") provided the employee has not otherwise been employed in the year after his termination in a situation where paragraph 146(5)(a) of the Act is applicable.

This opinion is our best interpretation of the law as it applies generally. It may, however, not always be appropriate in the circumstances of a particular case and, as stated in paragraph 24 of Information Circular 70-6R, it is not binding on this Department.

We hope our comments are of assistance to you.

Yours truly,

for Director Financial Industries Division Rulings Directorate Legislative and Intergovernmental Affairs Branch