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 amounts paid out of an RRSP as a life annuity qualified pension income for purposes of the pension tax credit where the amount was previously rolled from an RPP
Position:
No
Reasons:
The provision excludes amounts paid out of an RRSP except as a result of the death of the recipient's spouse. Amounts transferred to an RRSP do not retain their identity as pension income.
XXXXXXXXXX 970708
Attention: XXXXXXXXXX
April 16, 1997
Dear Sirs:
Re: Pension Income, Subsection 118(7) of the Income Tax Act (the "Act")
This is in reply to your letter of March 10, 1997, in which you asked if the term "qualified pension income" as defined in subsection 118(7) of the Act would include life annuity payments made out of a locked in registered retirement savings plan ("RRSP"), where a taxpayer is under 65 years of age and the RRSP was funded with amounts transferred from a registered pension plan. You note that paragraph (a) of the definition includes payments in respect of a life annuity paid out of or under a superannuation or pension plan.
It is our opinion that an RRSP is not itself a superannuation or pension plan but a retirement savings plan. It is also our view that amounts transferred into an RRSP from a pension plan do not retain their identity as pension income when paid out of the RRSP. Accordingly, amounts received out of an RRSP are not included in the definition of qualified pension income except to the extent they are annuity payments described under subparagraph (a)(ii) of the definition "pension income" and are received by the taxpayer as a consequence of the death of a spouse of the taxpayer.
We trust theses 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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