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 proceeds of disposition of an RRSP investment must be paid to RRSP trustee or to annuitant.
Position:
To RRSP trustee
Reasons:
Investor is the RRSP trust which is entitled to proceeds on disposition.
960151
XXXXXXXXXX P. Spice
Attention: XXXXXXXXXX
March 6, 1996
Dear Sirs:
Re: Registered Retirement Savings Plan (RRSP)
Investment in Small Business Investment Trust
This is in reply to your letter of December 14, 1995, to the Registered Plans Division which was forwarded to us, and further to our telephone conversation of February 19, 1996 (Spice/XXXXXXXXXX). You ask whether a refund of the subscription money paid by an RRSP for units in a small business investment trust should be paid to the custodian of the plan or to the annuitant.
As discussed in the above-noted telephone conversation, "an interest" in a small business investment trust (SBIT) is a qualified investment pursuant to the definition of "qualified investment" in subsection 146(1) of the Income Tax Act (the "Act") as prescribed in subsection 4900(6) of the Income Tax Regulations (the "Regulations").
With respect to your query, where the investor is an RRSP trust, the proceeds of disposition of the investment must be remitted to the RRSP trust and not to the annuitant directly.
We trust our comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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