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: Transfer of RRSP from one trustee to another - foreign property transferred first.
Position: Subject to 206(2) penalty if foreign property exceeds limits
Reasons: 206(2) applies in respect of a taxpayer - each trust is a "taxpayer"
xxxxxxxxxx 991577
S. E. Thomson
Attention: xxxxxxxxxx
September 15, 1999
Dear XXXXXXXXXX:
Re: Excess Foreign Content Due to Timin of Transfers
This is in reply to your letter of May 26, 1999 in which you ask for our opinion on how the timing of transfers between registered plans may affect the tax on excess foreign property.
In your letter you describe a hypothetical situation where an annuitant transfers all the property of his self-directed RRSP from one trustee to another in kind at fair market value. Even though the paper-work for all of the investments is prepared at the same time, it happens that the transfer of the foreign investments is confirmed prior to month-end, and the transfer of the Canadian investments is confirmed after month-end.
In our opinion, the RRSP transferee trust would be subject to the excess foreign property tax to the extent that its foreign property exceeded the thresholds as set out in subsection 206(2) of the Income Tax Act. The Canadian investments which were not owned by the transferee trust by month-end would not be included in the total of all property for purposes of the calculation. Whether or not an investment is owned by the transferee trust at month-end for purposes of Part XI of the Act is a question of fact.
We trust that we have been of some assistance.
Yours truly,
P. Spice
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1999
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1999
Email this Content