Regulation 8517


Canada v. Yudelson, 2010 DTC 5040 [at 6674], 2010 FCA 44

The taxpayer's defined benefit registered pension plan had a value of $680,900. Under the terms of the plan, the taxpayer could have purchased an indexed annuity contract, but did not. Instead he used $571,770 to purchase fixed annuity benefits of $52,934 per year and, after receiving the first such payment, transferred the remaining amount of $108,886 into his RRSP to fund indexation payments.

The transfer of the remaining amount exceeded the prescribed amount. While the Plan included savings to fund future benefits tied to the cost of living, at the time of this transfer no benefits were payable beyond the base amounts. Accordingly, the "prescribed amount" - the value of the foregone life retirement benefits - for the year of the transfer was nil, so that the amount of the $108,886 transfer was includible in his income.