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.
963640
XXXXXXXXXX M.P. Sarazin
Attention: XXXXXXXXXX
November 12, 1996
Dear Sirs:
Re: Bonus Interest and RRSPs and RRIFs
This is in reply to your letter dated October 23, 1996, wherein you requested our comments with respect to bonus interest payments by Credit Unions on deposits held in a registered retirement savings plan ("RRSP") and a registered retirement income fund ("RRIF").
We confirm that the positions expressed in our technical interpretation (5-923168) issued on November 30, 1992 continue to reflect the Department's views with respect to bonus interest paid on RRSP deposits. You have stated that the portion of any payment calculated on deposits held in the RRSP is to be reported on a T4RSP. We note that this statement is only correct with respect to the amount of bonus interest that is paid directly to the annuitant.
Under the provisions of paragraph 146.3(2)(g) of the Income Tax Act (the "Act"), a benefit may not be conferred on an annuitant under a plan where the benefit is conditional in any way on the existence of the fund. However, subparagraph 146.3(g)(i) excludes its application to a benefit that is required to be included in the annuitant's income. Generally, it would be our opinion that such a payment would be a benefit out of or under a RRIF and should be reported on a T4RIF. If it is determined that this payment is not such a benefit then the application of subsections 146.3(13) and 146.3(11) of the Act will result in the revocation of the registration of the RRIF.
We regret that we are not able to provide any comments with respect to the withholding taxes applicable where the bonus payment consists of shares. We have forwarded a copy of your letter to our Trust Accounts Division (formerly referred to as the Source Deductions Division) and we have asked them to respond to your question concerning the appropriate withholding taxes. Any questions regarding the status of your enquiry should be directed to Mr. Jim Ivey at (613) 954-1307.
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
c.c. Trust Accounts Division
Attention: Jim Ivey
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1996
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1996
Email this Content