30 November 1996 Ruling 9707993 - FOREIGN PENSION TRANSFER TO RRSP

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:

Will lump-sum XXXXXXXXXX pension withdrawal qualify for 60(j) deduction?

Position:

Yes

Reasons:

Meets all of the conditions in 60(j)

XXXXXXXXXX							970799
									XXXXXXXXXX

XXXXXXXXXX, 1997

Dear Sir:

Re: Advance Income Tax Ruling
XXXXXXXXXX

This is in reply to your letter dated XXXXXXXXXX, wherein you requested an advance income tax ruling. We acknowledge the information provided during our various telephone conversations (XXXXXXXXXX).

Our understanding of the facts and proposed transactions is as follows:

XXXXXXXXXX is a resident of Canada. His date of birth is XXXXXXXXXX. XXXXXXXXXX deals with the XXXXXXXXXX Tax Services Office and the XXXXXXXXXX Taxation Centre.

XXXXXXXXXX was a resident of XXXXXXXXXX and he worked for the XXXXXXXXXX until his retirement on XXXXXXXXXX. Since XXXXXXXXXX has received pension benefits from XXXXXXXXXX pension plan.

On XXXXXXXXXX was granted permission to immigrate to Canada and he arrived in Canada on XXXXXXXXXX. Since XXXXXXXXXX has included the annuity income received out of the XXXXXXXXXX pension plan as pension income in his Canadian personal income tax returns.

In a letter dated XXXXXXXXXX was advised that XXXXXXXXXX was providing all of its SR expatriate retirees with the choice of continuing to receive a monthly annuity or be paid a one-time lump-sum amount in lieu of the annuity. XXXXXXXXXX lump-sum entitlement amounts to XXXXXXXXXX which would become payable as of XXXXXXXXXX in U.S. dollars at the exchange rate on the date of payment. XXXXXXXXXX has advised XXXXXXXXXX that he would like to be paid the lump-sum amount.

XXXXXXXXXX has not yet received the lump-sum settlement.

Proposed Transactions

XXXXXXXXXX will open up a registered retirement savings plan ("RRSP").

When the lump-sum payment is received from XXXXXXXXXX pension plan, the amount will be converted to Canadian dollars and deposited in XXXXXXXXXX RRSP in the year received.

Purpose of the Proposed Transactions

XXXXXXXXXX would like to ensure that the lump-sum amount received out of the foreign pension plan is sheltered from tax until the amounts are withdrawn out of the RRSP or a registered retirement income fund.

Additional Information

To the best of your knowledge, none of the issues involved in this ruling request is being considered by a tax services office or taxation centre in connection with an income tax return already filed, and none of the issues is under objection or appeal.

Rulings Given

Provided that the statement of facts and proposed transactions are correct and constitute a complete disclosure of all of the relevant facts and proposed transactions, and that the proposed transactions are completed in the manner described herein, we rule as follows:

The lump-sum amount received by XXXXXXXXXX will be included in his income under subparagraph 56(1)(a)(i) of the Income Tax Act (the "Act").

Provided a designation is made in XXXXXXXXXX return of income for the year of receipt, the amount deposited in the RRSP will be deductible under paragraph 60(j) of the Act to the extent provided therein.

The above rulings, which are based on the Act in its present form and do not take into account any proposed amendments thereto, are given subject to the general limitations and qualifications set out in Information Circular 70-6R3 dated December 30, 1996, and are binding on Revenue canada provided that the proposed transactions described herein are implemented within six months of this letter.

Yours truly,

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