22 June 1998 External T.I. 9806925 - TRANSFER OF PROPERTY TO RRSP - TIMING

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: When does a disposition of property occur.

Position: Question of fact and law.

Reasons: Paragraph (c) of the definition of “disposition” under section 54 of the Act.

XXXXXXXXXX 5-980692
Fouad Daaboul

June 22, 1998

Dear Madam:

Re: Transfer of property to an RRSP

This is in reply to your letter of March 18, 1998, wherein you requested a written confirmation concerning the date at which you disposed of your shares of a corporation to a trust governed by a registered retirement savings plan (the “RRSP”) under which you are the annuitant.

Our comments

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. Questions concerning actual fact situations should otherwise be directed to your tax services office. Although we cannot provide a specific answer to your query, we offer the following general comments which are not binding on the Department.

The question as to when a disposition of property occurs is one of fact and law which can only be determined when all relevant facts are known and with reference to the terms of an agreement or the pertinent documents between yourself and the administrator of your RRSP. Generally, however, the date of disposition of a property is the date on which the beneficial ownership passes to the purchaser and the vendor has an absolute but not necessarily immediate right to be paid.

We confirm the comment of Mr. Frank Gillman of this office that once a disposition date is determined and the appropriate amount is paid for the shares by the RRSP no additional amount may be contributed to or removed from the RRSP in respect of that transaction without any adverse tax consequences. You and the administrator of your RRSP must determine what the disposition date was.

Questions of fact of this nature are usually resolved by officials of your local tax services office who are generally in a better position to appreciate all the circumstances of a particular case.

We trust our comments will be of assistance to you.

Yours truly,

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