16 September 1993 External T.I. 9326005 F - Spousal RRIF

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

Dear XXXXXXXXXX

RE:  Spousal Registered Retirement Income Fund

This is in reply to your letter of July 22, 1993, which was forwarded to us by the Mississauga District Taxation Office, and further to our telephone conversation (Spice/XXXXXXXXXX) of September 16, 1993. We apologize for the delay in responding. You ask four questions concerning the above-noted subject, and our answers follow.

Question 1

-     If only the minimum is withdrawn from the spousal registered retirement income fund (RRIF), do the attribution rules apply?

Answer 1

-     In a year that an amount is included in your spouse's income as a benefit under a RRIF, you will be required to include in your income the least of the three following amounts:

(i)     the total of all premiums you have paid to all spousal      registered retirement savings plans (RRSP's) in the year and in the previous two years;

(ii)     the amount included in your spouse's income as an amount received out of the RRIF in the year; and

(iii)     the amount by which the amount included in your spouse's income (i.e. the amount under (ii) above) exceeds the "minimum amount" under the RRIF.

Therefore, in a year where only the minimum amount is paid out of the RRIF to your spouse, there will be no income attributed to you with respect to that particular spousal RRIF.

Question 2

-     Does the Department allow for the minimum formula amount to be taken out the year that the RRSP is changed to a RRIF without attribution applying?

Answer 2

-     The definition of "minimum amount" in the Income Tax Act states that, for the year that the RRIF is entered into, the minimum amount is nil.

Question 3

-     How is the formula calculated?

Answer 3

-     As stated above, there will be no minimum amount for a RRIF taken out in 1993. In 1994, the minimum amount is the product obtained      when the fair market value of the fund at the beginning of 1994 is multiplied by the factor 1/(90 - annuitant's age at beginning of 1994).

Question 4

-     Am I allowed in 1994 to make a contribution to a spousal RRSP at the other institution and secure the tax advantage?

Answer 4

-     You may continue to make deductible contributions to your own and to spousal RRSP's based on your RRSP deduction limit in the year.  In addition, and as discussed in the above-noted telephone conversation, up to $6000.00 of periodic payments you receive from your registered pension plan and included in your income under subsection 56(1) of the Income Tax Act, may be transferred to your spouse's RRSP for each of the 1993 and 1994 taxation years, and a deduction taken under paragraph 60(j.2). Such a transfer is not subject to the RRSP deduction limit. You may not make a contribution to any RRSP for the year in which the annuitant attains age 72 or in any later year.

We enclose a copy of the 1992 Pension and RRSP Tax Guide for your further information. Please note the commentary at pages 51-52 concerning spousal RRIF's, at pages 46-47 concerning a RRIF's "minimum amount", and at pages 30-31 concerning transfers of periodic payments from your registered pension plan.

Yours truly

for DirectorFinancial Industries DivisionRulings Directorate