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.
970223
XXXXXXXXXX M.P. Sarazin
Attention: XXXXXXXXXX
March 3, 1997
Dear Sirs:
Re: Transfer from RCA to IRA
This is in reply to your letter dated January 27, 1997, wherein you requested our comments with respect to amounts transferred from a retirement compensation arrangement ("RCA") by a trustee to an individual retirement account ("IRA") on behalf of an individual who resides in Canada where both the RCA and the IRA are situated in the United States.
The specific issues of concern are:
(a)Will the transfer constitute a distribution by the RCA for purposes of the Part XI.3 refundable tax and for purposes of paragraph 56(1)(x) of the Income Tax Act (the "Act")?
(b)Will a T4A-RCA have to be issued by the RCA in respect of the transfer?
(c)Will withholding taxes be required under paragraph 153(1)(q) of the Act apply to the transfer?
Written confirmation of the tax implications inherent in particular proposed transactions are given by this Directorate only where the transactions are outlined in an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R3. Although we cannot provide a specific answer to your queries, we offer the following general comments which are not binding on the Department.
The determination of whether any payment out of an RCA would constitute a distribution by the particular RCA for purposes of the Act is a question of fact which can only be determined after a review of all of the relevant facts. Since the determination of whether a T4-RCA would have to be issued and whether withholding taxes would be required under paragraph 153(1)(q) of the Act depends upon the existence of a distribution by the particular RCA, we are unable to provide any comments other than in the context of an advance income tax ruling.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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