9 September 1996 External T.I. 9626685 - EXCESS AMOUNT T2033, T2030

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:

Are all transfers excess amounts requiring the use of a T2030?

Position:

No

Reasons:

Excess amount is only the amount that an annuitant may withdraw under the terms of the contract in excess of the minimum amount and the other amounts are considered transfer of property for purposes of T2033.

									962668
XXXXXXXXXX							M.P. Sarazin

Attention: XXXXXXXXXX

September 9, 1996

Dear Sirs:

Re: Forms T2030 and T2033

This is in reply to your letter dated August 2, 1996, wherein you requested our comments regarding the proper use of forms T2030 and T2033 with respect to amounts transferred between an individual's registered retirement income funds ("RRIF"). You have expressed a concern that a transfer of property requiring a form T2033 may also be considered a transfer of an excess amount requiring a form T2030.

Comments

Where a transfer of property between RRIFs satisfies the conditions found in paragraph 146.3(2)(e) of the Income Tax Act (the "Act"), paragraph 146.3(14)(a) of the Act deems the amount transferred not to be an amount received by the individual out of the RRIF for the purposes of subsection 146.3(5) of the Act. In this situation, a form T2033 should be used by the annuitant to instruct his or her RRIF carrier to make the direct transfer to another of the individual's RRIFs.

Where a transfer of property between RRIFs does not satisfy the conditions found in paragraph 146.3(2)(e) of the Act, the amount transferred has to be included in the income of the individual for the year of receipt under subsection 146.3(5) and paragraph 56(1)(t) of the Act. In this situation, a deduction is available under paragraph 60(l) of the Act with respect to the amount by which the amount transferred exceeds the minimum amount, within the meaning assigned by subsection 146.3(1) of the Act, and a form T2030 has to be used by the annuitant to instruct his or her RRIF carrier to make the direct transfer.

The terms of the particular RRIF contract will determine whether an amount transferred is a transfer of property excluded from income under paragraph 146.3(14)(a) of the Act or an amount transferred to be included in income under paragraph 56(1)(t) of the Act. For example, an individual wants to transfer $25,000 from one of her RRIFs (the "Transferor RRIF") to another of her RRIFs and, under the terms of the Transferor RRIF contract, the individual is entitled to withdraw an additional $4,000 in the year over and above the minimum amount. Where the individual has not withdrawn the additional $4,000 allowed under the Transferor RRIF contract, a T2030 would have to be completed in order to transfer the $4,000 amount which would have to be included in income under paragraph 56(1)(t) of the Act and a T2033 would have to be completed with respect to the $21,000 transfer of property which is exempt from inclusion in the individual's income under paragraph 146.3(14)(a) of the Act. Where the individual has withdrawn the additional $4,000 prior to the transfer date then the $25,000 would be considered a transfer of property and a form T2033 would have to be completed.

Should you have any further questions concerning these forms, please contact Catherine Simard of the Client Services Directorate at (613) 952-3848. Questions relating to technical interpretations of the Act should be directed to us.

We trust the above comments will be of assistance to you.

Yours truly,

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