10 March 1994 External T.I. 9402545 - RRIF - MINIMUM AMOUNT

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

	RULINGS DIRECTORATE
	CORRESPONDENCE SUMMARY
										940254

DOCUMENT TYPE:

Opinion

Principal Issues:

Minimum amount under a RRIF - paragraph 146.3(1)(b.1)

Position TAKEN:

As per proposed section 7308 of the Regulations

Reasons FOR POSITION TAKEN:

Routine

LEGAL:

FINANCE OPINION:

JURISPRUDENCE:

RCT PUBLICATIONS:

1993 Guide - RRSPs and Other Registered Plans for Retirement

HAA NUMBER:

HAA - 7251

							940254
XXXXXXXXXX									J. Stalker

March 10, 1994

Dear Sir:

This is in reply to your letter of January 29, 1994 concerning the "minimum payments" out of your registered retirement income fund ("RRIF").

The payment you are referring to is called the "minimum amount" in the Income Tax Act (Canada). The carrier of your RRIF, that is the financial institution you contracted with, will calculate this amount for you. However, we have set out the basic rules below, on the understanding that your RRIF was set up in 1993 and that you have elected to have the minimum amount based on your spouse's age.

The calculation depends on whether your RRIF is classified as a "qualifying RRIF".

If your RRIF was set up by you in 1993 with funds or property from another RRIF, it would be a "qualifying RRIF" if the first RRIF was set up in 1992 or earlier and had no funds or property contributed to it in 1993 or later, other than funds or property from another qualifying RRIF. If your RRIF meets these conditions and is a qualifying RRIF, the minimum amount for those years while your spouse is under the age of 79 at the beginning of the relevant year is calculated by dividing your RRIF's value at the beginning of the year by the number that equals 90 minus your spouse's age at that time. This calculation will change starting in the first year when your spouse is over 78 at the beginning of that year. From that year on, your minimum amount will be calculated by multiplying the value of your RRIF at the beginning of the year by the appropriate factor which corresponds to your spouse's age at the beginning of that year. These factors are listed on page 35 in chapter 4 of the booklet "RRSPs and Other Registered Plans for Retirement" which we have enclosed for your information.

If instead your RRIF was set up by you in 1993 with funds or property transferred from a Registered Retirement Savings Plan (RRSP), a registered pension plan or the Saskatchewan pension plan, or if it was set up with funds or property from another RRIF which was not a "qualifying RRIF", your RRIF would not be a "qualifying RRIF". Accordingly, different rules apply. If your spouse is under 71 at the beginning of the year, the minimum amount is calculated by dividing the value of the RRIF at the beginning of the year by the number that equals 90 minus your spouse's age at that time. For example, if your spouse is 62 at the beginning of the year, the value of your RRIF would be divided by (90 - 62) or 28. This calculation also changes in the first year your spouse is over 70 at the beginning of the year. From that year on, your minimum amount will be calculated by multiplying the value of your RRIF at the beginning of the year by the appropriate factor which corresponds to your spouse's age at the beginning of the year. These factors differ from those mentioned in the paragraph above in respect of "qualifying RRIFs" and are listed on page 36 of the enclosed booklet.

We trust our comments are of assistance.

Yours truly,

for Director
Financial Industries Division
Rulings Directorate

Encl.