1 December 1993 Income Tax Severed Letter 9332845 - RRSP Non-Resident Contribution Carry Forward

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.

                 RULINGS DIRECTORATE
                CORRESPONDENCE SUMMARY

DOCUMENT TYPE:

         Opinion

PRINCIPAL ISSUES:

         na

POSITION TAKEN:

         na

REASONS FOR POSITION TAKEN:

         na

LEGAL:

FINANCE OPINION:

JURISPRUDENCE:

RCT PUBLICATIONS:

HAA NUMBER:
         HAA 7255-3
                                           5-933284
XXXXXXXXXX                      (613) 957-8953

Attention: XXXXXXXXXX

December 1, 1993

Dear Sirs:

Re: Paragraph 60(i) and Subsection 146(5) of the Income Tax Act

This is in reply to your letter of November 8, 1993, in which you requested our comments on the application of the above noted provisions of the Income Tax Act (the "Act") when an individual ceases to be a resident of Canada and upon the person's subsequent return.

In computing income for a year in which a person is a non resident of Canada for all or a part of a year, an individual may deduct the lesser of the RRSP deduction limit for that year as defined under paragraph 146(1)(g.1) of the Act and the contributions made to his or her RRSP after 1990 and on or before a day that is 60 days after the end of the year to the extent these contributions exceed the portion described in subparagraphs 146(5)(a)(i) through (vi) of the Act. The deduction can be claimed in a year in which the person has income earned while a resident.

When an individual is not a resident of Canada, after 1990, he or she may make a contribution to an RRSP without limit and the amount of the contribution may be included in the amount determined under paragraph 146(5)(a) of the Act to the extent described above for that or any subsequent year. The provisions of subsections 146(5) and paragraph 146(1)(g.1) do not apply to limit the amount of the contribution but do apply to limit the deduction of contributions in a year. Similarly, subsection 204.2(1.1) of the Act does not limit the amount of contributions that can be made to an RRSP. Instead, it defines the amount of an individual's cumulative excess amount in respect of all of an individual's registered retirement savings plans for the purposes of Part X.1 of the Act. Paragraphs 146(8.2)(e) and (f) of the Act could, however, apply to deny a deduction of any amount withdrawn from an RRSP at a later date if the conditions in those paragraphs apply.

An individual's unused RRSP deduction room as defined in paragraph 146(1)(l) of the Act will account for unused contribution room during years when an individual is a non- resident of Canada. Such unused room may be carried forward to the extent provided by clause 146(1)(l)(ii)(B) of the Act. In general, this provision is intended to allow the carry forward of unused RRSP contribution room for up to seven years. However, it should be noted that clause 146(1)(l)(ii)(B) of the Act may limit the carry-forward to a lesser amount.

The above comments are based on our understanding of the law as it applies in general and may or may not apply to the circumstances of a particular case. However, the comments do not form an advance income tax ruling and are not binding on the Department.

We trust these comments are satisfactory to your needs.

Yours truly,

for Director Financial Industries Division Rulings Directorate