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.
XXXXXXXXXX
Attention: XXXXXXXXXX
Dear Sirs:
RE: Withholding Tax
This is in reply to your letter of February 19, 1993 wherein you requested whether the Income tax Act ("Act") requires a person to withhold tax from lump sum payments out of or under a registered retirement income funds ("RRIF") under certain circumstances.
Under paragraph 153(1)(l) of the Act, a person is required to withhold such amounts "as may be determined in accordance with prescribed rules". The prescribed rules are contained in Part I of the Income Tax Regulations ("Regulations"). Subsection 103(4) of the Regulations prescribes the rates of withholding tax on lump sum payments and subsection 103(6) of the Regulations defines lump sum payment for the purposes of subsection 103(4) of the Regulations.
The only lump sum payment out of or under a RRIF that is subject to withholding tax under the Regulations is a payment made during the lifetime of an annuitant referred to in subparagraph 146.3(1)(a) of the Act (paragraph 103(6)(d.1) of the Regulations). No amount of tax is required to be withheld by the payer of a lump sum payment out of a RRIF after the death of an annuitant.
We trust our comments will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate
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© Her Majesty the Queen in Right of Canada, 1993
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© Sa Majesté la Reine du Chef du Canada, 1993
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