10 February 1994 Internal T.I. 9403296 - RPP ARREARS OF PERIODIC PAYMENTS TRANSFER TO 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.

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

DOCUMENT TYPE:

Head Office Memo

Principal Issues:

Whether amount out of registered pension plan in satisfaction of arrears of periodic payments can be transferred to spouse's registered retirement income fund.

Position TAKEN:

No direct transfer is possible.

Reasons FOR POSITION TAKEN:

Transfer under either 147.3(4) or (7) only for a "single amount"; this amount is in respect to periodic payments and does not qualify.

LEGAL:

FINANCE OPINION:

JURISPRUDENCE:

See memo

RCT PUBLICATIONS:

See memo

HAA NUMBER:

7278

				February 10, 1994

	Head Office	Head Office
	Client Assistance Directorate	Rulings Directorate
H. Beauchemin	(613) 957-8953
	Director General
	Attention:  Rick Owen
			940329

XXXXXXXXXX

Further to our telephone conversation (Spice/Owen) of February 9, 1994, we enclose a facsimile transmission from the Charlottetown District Office concerning a request for administrative relief by the above-named taxpayer. We reviewed the situation and concluded that there are no provisions in the Income Tax Act (the "Act") which would permit a transfer of the lump sum payment from the pension plan to XXXXXXXXXX registered retirement income fund on a tax-deferred basis.

We agree with the position expressed by the Registered Plans Division that the payment relates to periodic payments payable for the period April 1, 1977 to date and cannot be considered a "single amount"; therefore, it will not qualify for transfer under either subsection 147.3(4) or (7) of the Act. The Department's position on the characterization of lump sum payments as "periodic" is described in Interpretation Bulletins IT-118R3 (para. 13) and IT-428 (paragraph 11). We understand that the position in IT-118R3 is based on the Federal Court of Appeal decision of The Queen v. Sills (85 DTC 5096). See also Hewitt-Carlson v. MNR (1989) 1 CTC 2065.

Furthermore, the amount exceeds the "prescribed amount" for purposes of subsection 147.3(4) and fails to qualify for transfer under that provision on this additional basis.

We have advised the Charlottetown District Office that the file has been referred to you.

for Director
Financial Industries Division
Rulings Directorate