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.
Principal Issues:
146(8.2) applicable where payment taxable pursuant to 212(1)(l)
Position TAKEN:
Only if election under section 217 is made
Reasons FOR POSITION TAKEN:
January 18, 1995
Head Office Head Office
International Tax Office Rulings Directorate
G. Martineau
Attention: G. Rowland (613) 957-8953
7-943098
Registered Retirement Savings Plan ("RRSP) payment to a non-resident
This is in reply to your memorandum of November 23, 1994 concerning the taxation of an amount out of RRSP to a non-resident in respect of a non-deductible excess contribution to an RRSP.
The payment to a non-resident of an amount out of his RRSP in respect of a non-deductible excess contribution to the RRSP is subject to a 25% Part XIII tax by virtue of paragraph 212(1)(l) of the Income Tax Act (the "Act"), since such amount is one "that would, if the non-resident had been resident in Canada throughout the taxation year in which the amount was paid, be required by section 146 to be included in computing his income for the year".
As indicated in the latter part of subsection 146(8.2) of the Act, a deduction under that subsection is available only where the related amount was included in the recipient's income. Thus, a deduction under subsection 146(8.2) is not available where the amount of the excess contribution was subject to Part XIII tax; i.e., where the amount was not included in computing the recipient's income under Part I of the Act.
However, a deduction under subsection 146(8.2) of the Act would be available where the amount received in respect of the excess contribution was included in income under Part I of the Act by virtue of a section 217 election.
Section Chief
Financing, Leasing and Deferred Plans Section
Financial Industries Division
Policy and Legislation Branch
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