27 October 1998 External T.I. E9812975 - COST AMOUNT, RRSP TO RRIF TFR

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: Can property be transferred from an RRSP to a RRIF or from a RRIF to a RRIF at its cost amount for purposes of section 206?

Position: No

Reasons: Position is well established and issue has been referred to the Department of Finance.

XXXXXXXXXX 981297
M. P. Sarazin
Attention: XXXXXXXXXX

October 27, 1998

Dear Sirs:

Re: Cost Amount of Property Transferred from an RRSP to a RRIF

This is in reply to your letter dated May 13, 1998, wherein you asked us to reconsider our position that transfers of property from a registered retirement savings plan (“RRSP”) to a registered retirement income fund (“RRIF”) for the same annuitant be recorded at the fair market value of the property.

We have recently completed a review of the above noted position. Since it is clear that the provisions of subsection 206(4) of the Income Tax Act (the “Act”) would apply to transfers between an RRSP and a RRIF, we could not support a change to the above position. The issue of whether transfers between RRSPs and RRIFs with the same annuitant should be at cost or fair market value has been brought to the attention of the Department of Finance.

We trust the above 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