20 August 1997 External T.I. 9719875 - LRIF, RRIF

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:

Is a life retirement income fund a registered retirement income fund for purposes of the Act?

Position:

Only if registered.

Reasons:

A life retirement income fund is an arrangement governed by provincial legislation and the carrier normally ensures that it is registered with the Department as a RRIF for purposes of the Act.

		                                    971987
XXXXXXXXXX		                                  	M.P. Sarazin

Attention: XXXXXXXXXX

August 20, 1997

Dear Sirs:

Re: Withholding Tax from a LRIF

This is in reply to your facsimile received on July 23, 1997, wherein you requested confirmation that a life retirement income fund ("LRIF") would be treated like a registered retirement income fund ("RRIF") for purposes of determining the withholding taxes required under the Canada-Mexico Income Tax Convention (1991). In addition, you would like confirmation that the withholding tax rate confirmed by our Non-Resident Withholding Tax Division is correct.

In your letter you have outlined what appears to be an actual fact situation related to a past transaction. The review of such transactions falls within the responsibility of tax services offices and it is the practice of this Department not to comment on such transactions when the identities of the taxpayers are not known. However, we can provide you with the following general comments which we hope will be of assistance.

A LRIF is an arrangement governed by provincial law. It is generally registered under the Income Tax Act (the "Act") as a RRIF and it is subject to additional rules contained in the particular provincial legislation. The LRIF will qualify as a RRIF for purposes of the Act only if it is, in fact, registered under the Act.

You already have the Department's views, as expressed by the Non-Resident Withholding Tax Division, with respect to the appropriate rate of withholding tax.

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

Yours truly,

for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate