3 June 1993 External T.I. 9310885 F - 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.

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Dear Sirs:

RE:  Transfer of Registered Retirement Savings Plan (RRSP) Pursuant to Paragraph 146(16)(b) of the Income Tax Act (the "Act")

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This is in reply to your letter of December 30, 1992 and your note of February 24, 1993, which were forwarded to us on April 14, 1993 by the Registered Plans Division. You have asked for a ruling stating that the Department will accept a transfer of funds in the above-noted RRSP to your ex-spouse's RRSP without any tax liability to you.

An advance income tax ruling is only available upon payment of the required fee and with respect to proposed transactions. Rulings are not issued on transactions that are already completed or on a series of transactions that are significantly advanced. In the situation described by you the Minutes of Settlement and the Consent Order have already been executed. We are unable, therefore, to provide a ruling which would be binding on the Department. Questions concerning completed transactions should be addressed to your district taxation office. We can offer, however, the following general comments for your information.

A transfer under paragraph 146(16)(b) of the Act can be effected if the following three conditions are met by you:

1.     You and your former spouse are living separate and apart.

2.     The transfer is made pursuant to a decree, order or judgment of a competent tribunal or pursuant to a written separation agreement.

3.     The payment relates to a division of property between you and your former spouse in settlement of rights arising out of your marriage on or after the breakdown of your marriage.

We wish to advise that the Consent Order was not required in order to satisfy the conditions of the Income Tax Act, but rather to permit the administrator of the locked-in RRSP to transfer the funds notwithstanding the requirements of the Alberta Employment Pension Plans Act. The Minutes of Settlement were sufficient for Income Tax Act purposes.

If the three conditions cited above are fulfilled, the amount withdrawn from your RRSP will not be brought into your income pursuant to subsection 146(8) of the Act, nor will you be permitted a deduction for the amount under any of subsections 146(5), (5.1) or (8.2) or under either section 8 or 60 of the Act.

Although the foregoing comments are not binding on the Department, we trust they are helpful in explaining the legislation. If you should have any further questions concerning the Income Tax Act, you may address them to your local district taxation office at 220-4th Avenue South East, Calgary, Alberta, T2G 0L1.

Yours truly,

for DirectorFinancial Industries DivisionRulings Directorate

c.c.      Mr. Gary Allen      Registered Plans Division