5 July 1988 Income Tax Severed Letter 5-6055 - [Withholding Tax on Payments Under an RRSP]

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.

Revenue Canada Taxation Head Office

F. Francis (613) 957-3498

July 5, 1988

Dear Sirs:

This is in reply to your letter of May 18, 1988, wherein you requested our views with respect to the calculation of withholding tax on payments under a registered retirement savings plan ("RRSP") in the following situation:

 Balance in RRSP            $10,000
 Fees upon closing         $   (50) 
 RRSP

Net payment to annuitant $ 9,950

We concur with your position that, pursuant to paragraph 153(1)(j) of the Income Tax Act (the "Act"), tax would be withheld on the net payment of $9,950.

It should be noted that investment counselling fees charged by the trustee of a RRSP directly to the annuitant are not deductible by the annuitant pursuant to the provision of paragraph 20(1)(bb) of the Act, as the property of the RRSP belongs to the trust and not the annuitant.

We trust the above comments are of assistance to you.

Yours truly,

for Director Financial Industries Division Rulings Directorate