17 April 2003 External T.I. 2003-0009105 - RETIRING ALLOWANCE-RRIF

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 CCRA.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.

Principal Issues: Can a retiring allowance be transferred to a RRIF?

Position: No.

Reasons: Paragraph 60(j.1) only allows rollovers to RPPs and unmatured RRSPs.

XXXXXXXXXX 			2003-000910

April 17, 2003

Dear XXXXXXXXXX:

RE: Retiring Allowance and Rollover under Paragraph 60(j.1)

We are writing in reply to your facsimile of March 19, 2003 wherein you requested our views as to whether an individual over the age of 69 would be eligible to transfer his or her retiring allowance to a registered retirement income fund ("RRIF") under paragraph 60(j.1) of the Income Tax Act (the "Act").

Comments

Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advanced Income Tax Rulings, dated May 17, 2002. Where the particular transactions are completed, the inquiry should be addressed to the relevant tax services office. The following comments are, therefore, of a general nature only and are not binding on the Canada Customs and Revenue Agency ("CCRA"). All publications referred to herein can be accessed on the CCRA website at the following address: http://www.ccra-adrc.gc.ca/tax/technical/incometax/menu-e.html.

The CCRA's general views regarding retiring allowances are found in IT-337R3 entitled "Retiring Allowances".

Paragraph 12 of IT-337R3 discusses the application of paragraph 60(j.1) of the Act. Paragraph 60(j.1) provides for a deduction for all or part of a retiring allowance included in a taxpayer's income under subparagraph 56(1)(a)(ii) and transferred to a registered pension plan or to a registered retirement savings plan under which the taxpayer is the annuitant. It is clear that paragraph 60(j.1) does not provide for a transfer of a retiring allowance to a RRIF.

In order to be registered for purposes of the Act, a retirement savings plan has to satisfy all of the conditions described in subsection 146(2) of the Act. Under paragraph 146(2)(b.3), one of the conditions is that the retirement savings plan does not allow for contributions to the plan after the plan's maturity and, under paragraph 146(2)(b.4), the plan cannot provide for maturity after the end of the year in which the annuitant attains 69 years of age. Consequently, after the end of the year in which an annuitant turns 69, the annuitant will not be entitled to transfer his or her retiring allowance to his or her RRSP.

We trust that these comments will be of assistance.

Yours truly,

Mickey Sarazin, C.A.

for Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Legislation Branch