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 father and children can pool their RRSP's into one.
Position TAKEN:
No.
Reasons FOR POSITION TAKEN:
Definition of "retirement savings plan" permits of only one annuitant.
XXXXXXXXXX 950551
May 30, 1995
Dear XXXXXXXXXX:
Re: Self-Directed Registered Retirement Savings Plan (RRSP)
This is in reply to your letter of February 20, 1995, in which you ask whether the self-directed RRSP's of you and your children could be operated on a joint basis with a brokerage firm so long as records were kept to show the contributions and earnings of each of the participants.
The Income Tax Act defines an RRSP as one of three types of plans. The type of plan which is referred to as a "self-directed" RRSP is in fact an arrangement between an individual and a trust company under which contributions are paid by the individual to the trust and the trust in turn invests those funds in various "qualified investments" (a defined term in the Income Tax Act). The contributions and earnings in the trust are then used to provide retirement income on the maturity date which can be no later than the end of the year in which the individual turns 71.
The definition in the Act of an RRSP permits of an arrangement with only one annuitant, and many of the rules relating to RRSP's, such as the maturity date and penalty tax associated with non-qualified investments, are contingent on the existence of an RRSP with only one annuitant.
Although it may be more economical or financially advantageous to pool the contributions of more than one individual in an investment vehicle, the Income Tax Act does not permit such a pooling with respect to individual retirement plans such as RRSP's or registered retirement income funds.
We are sorry our reply could not be more favourable but trust the foregoing comments assist.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
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