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.
Revenu Canada Taxation Head Office
W.C. Harding (613) 957-3499
October 19, 1988
Dear Sirs:
This is in reply to your letter of October 14, in respect of "Bonuses" on Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs).
It is our opinion that, when interest bonuses are paid directly to an RRSP, the provisions of paragraph 146(2)(c.4) of the Income Tax Act (the "Act") will not be applicable. That is, no advantage will be considered to have been extended to the annuitant of the RRSP by virtue of the bonus payment even if it is conditional in any way on the existence of the RRSP. There is no ceiling on such amounts.
Lotteries and contests that offer a prize which is deposited into the RRSP also do not run afoul of paragraph 146(2)(c.4) of the Act. On the other hand, prizes offered to the annuitant or to a party with whom the annuitant does not deal at arm's length (i.e. outside of the RRSP) would be considered benefits within the context of paragraph 146(2)(c.4) of the Act. Such a plan would cause deregistration of the RRSP.
The above comments are also applicable with respect to RRIFs and paragraph 146.3(2)(g) of the Act.
We trust these comments will be of assistance to you.
Yours truly,
for Director Financial Industries Division Rulings 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, 1988
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, 1988
Email this Content