Section 118

Subsection 118(1) - Personal credits

Paragraph 118(1)(a) - Married or common-law partnership status


The Queen v. Robichaud, 83 DTC 5265, [1983] CTC 195 (FCTD)

A taxpayer who married on December 23 and whose husband's income for the balance of the year thus was miniscule could not claim her husband as a dependant, despite expenditures (such as for clothing) being made by her for his benefit, because her husband's wages were twice her wages and she thus could not establish that she "supported" him.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(28) 12

See Also

Reid v. MNR, 91 DTC 1443 (TCC)

A man who had been the common law spouse of the taxpayer for thirty years was not a "spouse" for purposes of the Income Tax Act.

Administrative Policy

23 December 2014 External T.I. 2014-0543311E5 - Reporting marital status

meaning of separate and apart

A married couple no longer reside together because one spouse has advanced Alzheimer's and has been moved to a nursing home indefinitely. The other does not care for his or her spouse other than visiting and ensuring that all financial needs are met. Should their marital status be reported as separated? CRA stated that it:

accepts that individuals are separated when they live separate and apart from their spouse or common-law partner because of a breakdown in the marriage or common-law partnership for a period of at least 90 days without reconciling.

…It is the CRA's position that spouses or common-law partners are not living separate and apart for purposes of the Act where the separation is for reasons other than a breakdown of their relationship….for example… a separation for attendance at school or for work, or where there is an involuntary separation such as for medical reasons or incarceration.

Paragraph 118(1)(b) - Wholly dependent person


Pilette v. Canada, 2010 DTC 5075 [at 6808], 2009 FCA 367

The legislative choice reflected in s. 118(1)(b)(ii)(D), that no credit would be provided to young adults over the age of 18 who remained dependant upon their parents but were not suffering from a mental or physical infirmity, did not engage the right to equality set out in s. 15 of the Charter given the absence of direct or indirect discrimination in this legislative design.

The Queen v. Mercier, 97 DTC 5081 (FCTD)

The 18-year age limit in s. 118(1)(b)(ii)(D) was not contrary to s. 15(1) of the Charter (and would have been justified under s. 1 of the Charter if it were).

See Also

Severinov v. The Queen, 2013 DTC 1230 [at 1260], 2013 TCC 292 (Informal Procedure)

"any time in the year" ≠ "throughout the year"

The taxpayer appealed the denial of Canada child tax benefits and child tax credits. In respect of the child tax credits, the Minister's Reply was written as if the words "at any time in the year" in s. 118(1)(b) had instead been "throughout the year."

Woods J found that the Minister's failure to identify the proper test may have been prejudicial to the taxpayer. She allowed the taxpayer's appeal on this issue.

Abiola v. The Queen, 2013 DTC 1141 [at 754], 2013 TCC 115 (Informal Procedure)

The taxpayer paid child support, pursuant to a court order, in respect of her three children who lived with her spouse. The taxpayer's daughter moved in with her, prompting a second order to amend the first. The second order was vaguely worded, but was calculated in a manner that appeared to acknowledge that the taxpayer was no longer obligated to pay child support in respect of her daughter. The taxpayer was therefore not prevented from claiming Canada child tax benefits in respect of her daughter.

Bruno v. The Queen, 2007 DTC 1172, 2007 TCC 360 (Informal Procedure)

The taxpayer, who was separated from his former spouse, resided with his son in a self-contained, one-bedroom suite in the matrimonial home, but with his son sleeping in the portion of the matrimonial home that continued to be occupied by the former spouse. In finding that the son was wholly dependent upon the taxpayer for support, Rossiter J. rejected the Crown's submission that it was essential that the dependent sleep in the self-contained establishment.

Mercier v. MNR, 92 DTC 1693 (TCC)

Lamarre Proulx J. found that s. 118(1)(b)(ii) of the Act should be considered to be of no effect in light of s. 15 of the Charter and that it should be read as if clause D had not been enacted.

Administrative Policy

29 January 2019 External T.I. 2018-0780481E5 F - Tenir un établissement domestique autonome

“self-contained domestic establishment” entails expense responsibility

CRA stated for purposes of ss. 6(6)(a)(i) and 118(1)(b), its general position was:

that an individual maintains a self-contained domestic establishment if the individual owns or rents a self-contained domestic establishment which is the individual’s principal place of residence and for whose maintenance the individual is responsible, alone or with other persons.

However … if an individual is not the owner or tenant of a self-contained domestic establishment (or the co-owner or co-tenant) but pays the expenses of the self-contained domestic establishment on a regular basis because of the individual’s responsibility for the establishment, we are generally of the view that the individual maintains a self-contained domestic establishment.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 6 - Subsection 6(6) - Paragraph 6(6)(a) - Subparagraph 6(6)(a)(i) can qualify as self-contained domestic establishment if no ownership but expense responsibility 137

2 March 2015 External T.I. 2014-0527281E5 F - Tenir un établissement domestique autonome

non-owner/tenant to qualify must pay expenses on regular basis

In affirming the position taken in 2013-0484781E5 F, CRA stated:

[I]f an individual is not the owner or the tenant of a self-contained domestic establishment (or the co-owner or the roommate) but pays the expenses of the self-contained domestic establishment on a regular basis because the establishment is under his or her responsibility…[then] the individual maintains a self-contained domestic establishment. …

Furthermore, if [the] individual… [instead] only contributes to certain expenses of another person who maintains a self-contained domestic establishment, in a random and irregular manner,…[then] the individual does not maintain a self-contained domestic establishment.

In… 2013-0484781E5…the individual contributed only randomly and irregularly to the expenses of the person maintaining the self-contained domestic establishment.

Words and Phrases

11 June 2013 External T.I. 2013-0484781E5 F - Établissement domestique autonome

contributing to the expenses of the owner and co-occupant does not qualify

In finding that a single mother with minor children who lives with her parents and contributes to some expenses incurred by her parents in relation to the home could not receive the wholly dependent person credit, CRA stated:

If the individual is not the owner or renter of a self-contained domestic establishment (or co-owner or co-renter) but contributes only to certain expenses of another person who maintains a self-contained domestic establishment … the individual does not maintain a self-contained domestic establishment.

4 January 2000 External T.I. 4-993302 -

Discussion of the meaning of the phrase "living separate and apart".

28 May 1991 Memorandum (Tax Window, No. 3, p. 29, ¶1266)

Two individuals, each having a child and maintaining a separate home, who are entitled to the equivalent-to-married claim under s. 118(1)(b) at the beginning of the year do not lose that entitlement for the year by virtue of marrying each other in the year and sharing a home for the balance of the year.

Subparagraph 118(1)(b)(ii)

Administrative Policy

11 July 2013 External T.I. 2013-0490591E5 F - Montant pour une personne à charge

conditions not satisfied where children did not live with non-supporting husband following separation

Mr. and Ms., who had two children under 18, lived in a common-law relationship for three years and the separated, with Ms. obtaining, by written agreement, the complete custody of the two children. You indicated that Mr. did not claim the spouse or common-law partner credit in his return for in the year of separation, and Ms. was not entitled to any support. They lived in separate, self-contained residences during the period of the year after their separation. CRA responded:

… Mr. would not meet the conditions of paragraph 118(1)(b) since, on the one hand, during the part of the year of separation in which he lived separate and apart from Ms., neither of the two children lived with him and, on the other hand, he lived with Ms. during the other part of the year of separation.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Common-Law Partner can be in a conjugal relationship even if live in the same home for only half of each year 140
Tax Topics - Income Tax Act - Section 2 - Subsection 2(1) sole fact of a non-resident having a conjugal relationship with a Canadian resident does not render him a resident 165

2 February 2017 Quebec CPA Individual Taxation Roundtable Q. 1.6, 2016-0674861C6 F - Wholly dependent person tax credit

meaning of support/legal custody not required/ITA is silent on number of days child must spend with parent

Where a parent only has access or visitation rights with his or her child for every other weekend, can the CRA confirm that the parent in question who has, at any time in the year, maintained and inhabited a self-contained domestic establishment in which the parent provided for the child, who was wholly dependent on the parent at that time, may thereby claim the WDPTC in respect of the child in question, assuming that the other conditions are met? CRA responded:

As a general rule, the CRA considers that an individual has a fully dependent child when he or she is responsible for the normal day-to-day activities of raising the child such as ensuring that the child goes to school, has meals, has housing, etc. In other words, the child must live with the parent on the days in question, as opposed to a parent who would only have visitation rights while the child was considered to be living with the other parent.

Thus, the CRA does not consider it absolutely necessary for parents to have legal custody of the child….

…[T]he Income Tax Act…is silent with respect to the number of days the child must spend with a parent so that the parent can take advantage of the credit.

Subparagraph 118(1)(b)(ii)

Paragraph 118(1)(b.1)

Administrative Policy

13 July 2016 External T.I. 2013-0513701E5 F - Montant pour enfant

child accepted as ordinarily residing with parent with joint custody

Mr. A and Ms. B were ex-spouses living in separate self-contained domestic establishments by reason of the breakdown of their marriage, they had equal shared custody of their child, Mr. A paid a support amount in respect of his child and only Ms. B had a new spouse? CRA stated (TaxInterpretations translation):

[T]he Canada Revenue Agency accepts, for the purposes of paragraph 118(1)(b.1), taking an administrative position for the child to be considered as ordinarily residing, throughout the taxation year, with Ms B.

Paragraph 118(1)(b.1) has been modified… [for] 2015 and subsequent taxation years. Despite the new wording of paragraph 118(1)(b.1), we believe that the comments above would continue to be relevant, with the necessary modifications, to determine whether the conditions are satisfied.

18 October 2012 External T.I. 2012-0452131E5 F - CIE, établissement domestique autonome

s. 118(1)(b.1) credit can be claimed for different children by different parents

Is it possible for spouses living in the same, self-contained domestic establishment to apply for the child tax credit (CTC) under s. 118(1)(b.1)(i) respecting different children, e.g., Mrs X claiming for child A and Mr Y claiming for child B? CRA responded:

Paragraph 118(4)(b.1) differs from paragraph 118(4)(b) by the absence of the rule limiting the number of applicants for a CTC to one applicant from a self-contained domestic establishment.

Consequently … it is possible for spouses living in the same self-contained domestic establishment as their children to be able to claim separate CTCs for separate children. However, only one individual is entitled for one taxation year to the CTC for the same child.

26 July 2012 External T.I. 2012-0440261E5 F - Crédit d'impôt pour enfants

end-of-year requirement not satisfied when child died in year before attaining 18

A child would have attained the age of 18 in a year, but died before that date. In finding that the credit was not available, CRA noted that the presumption in s. 118(9.1) did not affect the end-of-the year requirement in s. 118(1)(b.1)(i) or (ii), and stated:

[B]oth subparagraph 118(1)(b.1)(i) and subparagraph 118(1)(b.1)(ii) make it a requirement that the child for whom the credit is claimed be under 18 years of age at the end of the year . …[T]his requirement is not satisfied for a particular year when the child would have reached the age of 18 in the year, had it not been for the child’s death.

Paragraph 118(1)(c.1)

Administrative Policy

30 May 2013 External T.I. 2013-0479671E5 F - Montant pour aidants naturels

care for ex-spouse in another home did not qualify

For a few months, the taxpayer spent significant time with her ex-spouse (and father of her child) who since died from cancer. She helped him at his home and during his visits to the hospital Your ex-spouse is the father of your minor son. CRA indicated that the conditions in s. 118(1)(c.1) were not met since her ex- spouse did not live with her and was not a person coming within s. 118(1)(c.1)(ii).

Paragraph 118(1)(d) - Dependants


Adams v. The Queen, 85 DTC 5528, [1985] 2 CTC 317 (FCTD)

A fetus is not a child for the purposes of s. 109(1)(d) and is not wholly dependent for support upon the husband of the mother.

Administrative Policy

25 May 2012 Ministerial Correspondence 2012-0444181M4 - Tuition tax credit - exam fees

family physician exam fees

If the fee paid by an individual for an examination taken in the year, such as, for Part I and Part II of the Medical Council of Canada Qualifying Examination and the certification by examination by the College of Family Physicians of Canada, is required by the College of Physicians and Surgeons of Ontario to license the individual to practise as a family physician in Ontario, the fee will qualify under subparagraph 118.5(1)(d).

Subparagraph 118(1)(d)(ii)

See Also

The Queen v. Diaz, 81 DTC 5112, [1981] CTC 138 (FCTD)

"[T]he word 'infirmity' implies more than mere retirement age ... [and] must be taken in its general sense, i.e., the state of being of poor or deteriorated vitality." The mother of the taxpayer, who suffered from high blood pressure and whose general physical condition was poor, was "infirm".

Words and Phrases



See Also

Leeper v. The Queen, 2015 DTC 1115 [at 733], 2015 TCC 82 (Informal Procedure)

supplements, vitamins and herbs not eligible

Paris J denied the taxpayer's claim for a medical expense tax credit relating to the purchase of natural health products including vitamins, minerals, herbs and naturopathic supplements to treat his wife's cancer. None of these items were available only by perscription, as required in s. 118(2)(n).

Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Charter (Constitution Act, 1982) - Subsection 15(1) non-creditability of natural cancer remedies not discriminatory 47
Tax Topics - Other Legislation/Constitution - Charter (Constitution Act, 1982) - Section 7 unavailability of tax credit for natural cancer remedies did not infringe the taxpayer's s. 7 rights 48

Subsection 118(4) - Limitations re s. (1)

Paragraph 118(4)(a.1)

See Also

Ullah v. The Queen, 2014 DTC 1022 [at 2632], 2013 TCC 387 (Informal Procedure)

amount is not "deducted" unless it actually changes taxable income

Paris J agreed with the taxpayer that, although the taxpayer's father had claimed spousal tax credits in respect of her mother, she was entitled to claim wholly dependent person credits for her mother in those same years. Her father's income was low enough in those years that, even without the credits, his taxable income for the year would have been nil. Therefore, it could not be said that there was an amount "deducted" in the manner described s. 118(4)(a.1) (as "the claim does not in fact reduce or affect tax payable in any way, it cannot be said that there has been any deduction of an amount in computing tax payable" (para. 12)), and so the father's claiming the spousal credit was not a bar to the taxpayer.

(This appeal was necessary because complications relating to the father's bankruptcy made it unfeasible to adjust his return to withdraw the claimed credits.)

Subsection 118(5) - Support


Nelson v. Canada (Attorney General), 2000 DTC 6556 (FCA)

The taxpayer was denied a credit under s. 118(5) in respect of child support paid by him to his ex-wife for their two children given that he claimed and was allowed a deduction for those payments under s. 60(b) or (c).

See Also

Cook v. The Queen, 2017 TCC 188 (Informal Procedure)

court order retroactively terminating support obligation to the taxpayers’ agreement thereon respected – but s. 118(1) claim denied as entailing proration

In 2010 the Alberta Court of Queen’s Bench issued an order, granting the taxpayer and her ex-wife joint custody of their child, with the child’s primary residence to be with the ex-wife in Edmonton and the taxpayer paying monthly support. However, as a result of a move of the ex-wife in June 2013, and the taxpayer and she agreed that the child’s primary residence would change to that of the taxpayer and that the taxpayer’s support payments would cease. In 2014 the Alberta Court of Queen’s Bench issued an interim order that reflected this 2013 agreement, providing that any existing arrears in support payments per the December 2, 2010 Order were vacated and that the Appellant, “… shall be entitled to claim the child from 2014 onward for tax purposes until there is a change in primary residential parenting.” The taxpayer claimed dependent and child deductions for the 2013 taxation year under s. 118(1)(b) and (b.1) of the Act. The Minister reassessed to deny the claims on the basis that s. 118(5) prohibited their deductions.

Russell J stated (at paras 15, 16, and 17):

There are in general two lines of authority respecting application of subsection 118(5) in circumstances akin to herein where, while a court order existed during the applicable taxation year requiring periodic payment of support amounts, non-payment of such amounts was retroactively excused by a subsequent Order.

One line reflects a purely textual approach, not affected by any retroactive change of circumstances applying to the pertinent taxation year. …

The other line of authority … recognizes as relevant a subsequent order cancelling support arrears arising in the context of a de facto shift of a child’s primary residence… . In Barthels, … Hershfield TCJ considered that subsequent cancellation of support arrears where a custodial child had moved to the claimant parent’s residence did neutralize the original requirement to pay support amounts. …

Russell J further stated (at para 19)

My preference as to these two lines of authority is that represented by Barthels. However … [c]an the subsection 118(1) deductions be prorated in view of any support payments made by the Appellant for the first several months of the pertinent taxation year? …

In this regard, he held (at para 26):

… I concur with the decision of this Court in Young, … per Sarchuk, J., that no statutory language used in or in connection with subsection 118(1) indicates that the deductions may be prorated for a taxation year, noting in contrast with other provisions in the Act by which Parliament has explicitly provided for proration.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Effective Date tax effect given to a retroactive court order 150

Ochitwa v. The Queen, 2014 DTC 1195 [at 3740], 2014 TCC 263 (Informal Procedure)

s. 118(5) applied despite being somewhat arbitrary
see also Belway v. The Queen, 2015 DTC 1211 [at 1361], 2015 TCC 249

The taxpayer made support payments, in respect of their two children, to his spouse based on an offset of their two incomes (i.e., on the $40,000 excess of his income over hers). C Miller J found that this precluded the taxpayer from claiming Canada child tax benefits, pursuant to s. 118(5).

C Miller J acknowledged that the Act was somewhat arbitrary in this respect - for example, if the offset arrangement were based on an agreement that both parents pay child support to each other, rather than the higher-income parent paying support to the lower-income parent based on the difference, then s. 118(5.1) would override s. 118(5), leading to a more favourable tax result (i.e., a deduction for both parents) despite the net child support payment made by the taxpayer being identical.

Giroux v. The Queen, 2012 DTC 1286 [at 3883], 2012 TCC 284 (Informal Procedure)

The taxpayer assumed sole custody of his son on 1 November 2008, and claimed credits under s. 118(1)(b). The Minister denied the taxpayer's claims for his 2008 and 2009 taxation years pursuant to s. 118(5)(a) on the basis of a support order that required the taxpayer to make support payments to his former spouse until 15 February 2009.

Lamarre J. granted the taxpayer's appeal for 2009. She found that there was a potential ambiguity in the Act as to when the requirement to pay the support amount needs to be in place (para. 20), but it was clear that the taxpayer had sole custody throughout 2009. She stated (at para. 22):

[A]n order payment requirement is inherently conditional on the custody situation set out in that order. As soon as the child left the mother's house to move in with his father, the situation that existed [when the order was made] could not entitle the former spouse to require the appellant to pay said support.

She denied the taxpayer's appeal for 2008 based on the "throughout the year" wording of s. 118(1)(a).

Administrative Policy

8 May 2014 External T.I. 2014-0516711E5 F - Accord écrit et Pension alimentaire

court-ordered support amount obligation cannot be eliminated by agreement

Monsieur must pay support to Madame for her two minor children under an order. As a result of changed circumstances, the parties signed an agreement providing that Monsieur is no longer required to pay a support amount. No new court orders have been issued. Does s. 118(5) deny the wholly dependent person credit under s. 118(1)(b)? CRA responded:

In Roy [2011 TCC 511] the TCC was clear that no agreement between the parties can extinguish the child support obligation. …

In Québec ... [a]n order made by the Superior Court may … be amended only by it.

Consequently, in the situation you described, we are of the view that the agreement between the parties is not sufficient to relieve Monsieur of his obligation to pay support for his minor children for the purposes of subsection 118(5). Consequently, Monsieur would not be entitled to the wholly dependent person credit provided under paragraph 118(1)(b).

Subsection 118(5.1) - Where subsection (5) does not apply

See Also

Cunningham v. The Queen, 2012 DTC 1223 [at 3622], 2012 TCC 279 (Informal Procedure)

Boyle J. dismissed the taxpayer's position that he and his former spouse could make support payments to each other under their separation agreement, and thereby avoid the application of s. 118(5). The Tax Court "has consistently dismissed taxpayers' appeals in cases of shared custody" (para. 11). Boyle J. stated (at para. 11):

In each of these cases, it was decided that in shared custody arrangements governed by the [Federal Child Support Guidelines], there are not two offsetting support payments payable by the parents and that there is only one parent required to make support payments.

Subsection 118(6) - Definition of dependant

See Also

Therrien v. Agence du revenu du Québec, 2019 QCCQ 28

adult daughter of the taxpayer’s ex-common law partner was the taxpayer’s “child”

When the handicapped daughter (“V”) of the taxpayer’s ex-common law partner was 22, she started living with the taxpayer. Whether the taxpayer (Therrien) was able to claim medical tax credits for expenses associated with V turned on whether V was a “child” of the taxpayer. The relevant part of the Quebec Taxation Act definition of “child” (which was essentially the same as ITA s. 252(1)(b)) referred to:

a person who is wholly dependent on the taxpayer for support and of whom the taxpayer has, or immediately before such person attained the age of 19 years did have, in law or in fact, the custody and control

In finding that this test of “custody and control … in law or in fact” was satisfied (so that the credits were earned), Massol JCQ stated (at para. 34, TaxInterpretations translation):

The evidence establishes that in 2011 and 2012, V was wholly dependent on Richard Therrien and that he had custody and control of her in fact.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 252 - Subsection 252(1) - Paragraph 252(1)(b) handicapped adult child satisfied test even though didn't move in until age 22 357

Savoy v. The Queen, 2011 DTC 1086 [at 479], 2011 TCC 73 (Informal Procedure)

In determining that the taxpayer's quadriplegic brother was the taxpayer's dependant, Hogan J. stated (para. 3):

The renovations were done so that the Appellant's brother would have suitable accommodation where he could be properly cared for near his family. In my opinion, this is precisely the type of support that is contemplated by the definition of dependent.

Subsection 118(7) - Definitions

See Also

Létourneau v. The Queen, 2010 DTC 1098 [at 3020], 2009 TCC 614 (Informal Procedure)

Upon his retirement as partner in a professional accounting firm, the taxpayer began to receive an annual allowance of $41,607 subject to an annual cost of living increase of up to 3% per annum, which was calculated based on the maximum number of units he had held in the partnership. Lamarre J. found that as the partnership agreement provided that retired partners would be allocated partnership income equal to their allowances (and also given that the payments to retired partners were limited to 15% of firm profits), the taxpayer was deemed by s. 96(1.1) to receive his allowances as a share of partnership profits. As s. 96(1.1) applied "notwithstanding any other provisions of this Act," it followed that the allowances were not eligible pension income.

Morin v. The Queen, 92 DTC 1069 (TCC)

Periodic amounts received by the taxpayer, who was permanently disabled, from Sun Life under the Consumers' Gas sickness, disability and rehabilitation plan were taxable under s. 6(1)(f) and did not constitute pension payments or pension benefits. "A pension is essentially a payment received on or after retirement on a periodic basis by an employee".

Pension Income

See Also

Taylor v. The Queen, 2014 DTC 1108 [at 3229], 2014 TCC 102 (Informal Procedure)

periodic discretionary withdrawals ≠ periodic amount

The taxpayer had discretion as to when and in what amount to withdraw from her RRSP. Woods J found that the taxpayer's decision to make annual withdrawals did not bring the withdrawals under the definition of an "annuity," and therefore the taxpayer was ineligible for a pension tax credit based on the s. 118(7) definition of "pension income."

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Annuity periodic discretionary withdrawals ≠ periodic amount 57

Cantin v. The Queen, 2014 DTC 1076 [at 3061], 2014 TCC 20 (Informal Procedure)

"pension supplement payments" under a disability insurance policy were not pension income

The taxpayer, an electrical engineer at Ontario Hydro, suffered chronic depression and became eligible under for long-term wage-loss benefits under his employer's group disability plan. When he turned 65, the wage-replacement plans changed to pension supplement payments, also paid by the insurer.

Masse DJ found that the taxpayer was ineligible to split the payments with his wife, as the payments were not "pension income." There was nothing in the taxpayer's insurance policy to indicate any intention to establish a pension plan, the fact that the insurance provided that benefits were paid in a different form after age 65 did not change the payments' character and the payments were not provided by a pension fund, a pension plan, a RRIF or an RRSP.

Administrative Policy

6 May 2014 May CALU Roundtable, 2014-0523311C6 - CALU Pension splitting - question 4

LRIF/LIF payments not of life annuity in respect of pension plan

Would "qualified pension income" include payments in respect of a life annuity out of a locked-in RIF (LRIF) or Life Income Fund (LIF) where the locked-in account is funded with amounts transferred from a RPP and the recipient is under 65 years of age. CRA responded:

[LRIFs and LIFs] are treated simply as a RRIF… . [A] RRIF is not a superannuation or pension plan, and amounts transferred into a RRIF from a pension plan (or indirectly via an RRSP) do not retain their identity as pension income when paid out of the RRIF.

…[T]he stream of income payable from a LRIF or LIF would not be considered a life annuity, as the annual payments are determined each and every year by reference to the current fair market value of the property of the LRIF or LIF, and the annuitant has discretion to select the total payments to be made each year within the range permitted by the applicable income tax and pension rules.

25 June 2012 External T.I. 2011-0398691E5 - Conversion of U.S. Traditional IRA into Roth IRA

CRA stated that, where a Canadian-resident individual converts a traditional US Individual Retirement Account ("IRA") to a Roth IRA, the amount of the IRA will be included in the taxpayer's income. Because payments out of an IRA are not "eligible pension income" under s. 118(7), pension splitting under s. 60.03 is not available.

4 January 1993 Memorandum 923244 (November 1993 Access Letter, p.505, ¶C117-207)

Re distinction between annuity income and gain from disposition of an annuity contract.