28 April 1995 Internal T.I. 9503307 - TRANSFER TO RRSP FROM U.K. PLAN

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:

	Whether transfer from U.K. SERPS eligible for tax-	deductible contribution to RRSP.

Position TAKEN:

Not enough information.

Reasons FOR POSITION TAKEN:

Only transfer from a U.K. plan is under 60(j) - must determine if it is a lump sum out of an unregistered pension plan attributable to employment while not resident in Canada.

			April 28, 1995

	OTTAWA TAX SERVICES	HEADQUARTERS
P. Middlestead, Director	P. Spice
			957-8953
	Attention:  Cathy Payette
	              ITPS, Audit
			950330

Letter of January 11, 1995 from XXXXXXXXXX

This is in reply to your memorandum of February 6, 1995, in which you enclosed the above-noted letter concerning a transfer of a U.K. plan to a registered retirement savings plan (RRSP). You asked us to respond to the XXXXXXXXXX query which was made on behalf of their client, XXXXXXXXXX

The situation described in the letter is the subject of a proposed transaction and, as noted in Information Circular 70-6R2, we are unable to provide an opinion to the client on the tax consequences except in the context of an advance income tax ruling. We are, therefore, returning the letter and providing some general comments to you which may assist you in responding to the XXXXXXXXXX

If the amount to which XXXXXXXXXX is entitled under the U.K. scheme can be characterized as a superannuation or pension benefit which is taxable upon receipt under subparagraph 56(1)(a)(i) of the Income Tax Act (the "Act"), then he may be entitled to contribute it to an RRSP and take a deduction in accordance with paragraph 60(j) of the Act. See page 38 of the 1994 RRSP and Other Registered Plans for Retirement Guide concerning this type of contribution.

We were unable to determine from the information provided by the XXXXXXXXXX whether the amount XXXXXXXXXX will be receiving is being paid out under the "Choices Personal Pension Scheme" or the "State Earnings Related Pension Scheme" (SERPS). It appears that XXXXXXXXXX "contracted-out" under the SERPS but is still entitled to a retirement benefit secured by "Protected Rights" which is funded by the U.K. Department of Social Security. Although the XXXXXXXXXX indicates that it has provided us with all the information that its client has in his possession, there are references in the materials to a Member's Booklet which might assist the Department in making the proper determination.

It may be that the Choices Personal Pension Scheme and the SERPS are integral parts of one plan and the whole may be characterized as a pension plan; alternatively, the SERPS may be similar to a government social security plan and the Choices Personal Pension Scheme similar to a personal retirement arrangement much like an RRSP. If the latter is the case, there is no provision in the Act for a tax-deductible transfer to an RRSP.

We trust the foregoing information assists. If you are provided with more information from the XXXXXXXXXX including the Member's Booklet mentioned above, and you wish our further assistance, please do not hesitate to contact us.

for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch