Principal Issues: [TaxInterpretations translation] Subparagraph 146(8.2)(c)(ii) refers to the year in which a notice of assessment is sent. Is this the notice of assessment under Part I?
Position: Yes.
Reasons: Contextual analysis.
2009-034412 XXXXXXXXXX Catherine Ayotte, Notary, M.Fisc. January 26, 2010
Dear Sir,
Subject: Over-contributions to an RRSP
This is in response to your letter dated June 9, 2009, addressed to Ms. Sylvie Bellerose of the Trois-Rivières Tax Services Office. In this letter, you asked the Canada Revenue Agency (CRA) to review its position regarding the interpretation of the reference to "notice of assessment" used in subparagraph 146(8.2)(c)(ii). You are of the view that this reference refers to a "notice of assessment" filed under any part of the Act rather than a "notice of assessment" filed under Part I of the Act.
Please note that unless otherwise indicated, all legislative references herein are to the provisions of the Income Tax Act (the "Act").
Our Comments
By virtue of subsection 146(8), a taxpayer is required to include in income the total of all amounts received by the taxpayer in the year as benefits out of or under registered retirement savings plans (RRSP).
Where a taxpayer inadvertently contributes more than the taxpayer's "RRSP deduction limit" to the taxpayer’s RRSP, subsection 146(8.2) allows a deduction for a payment received from an RRSP if the payment relates to undeducted premiums and is otherwise included in computing the taxpayer's income for the year.
In order to benefit from this deduction, paragraph 146(8.2)(c) provides that the payment must be received in:
(i) the year in which the premiums were paid by the taxpayer,
(ii) the year in which a notice of assessment for the taxation year referred to in (i) was sent to the taxpayer, or
(iii) the year immediately following the year referred to in (i) or (ii).
In determining the notice of assessment referred to in subparagraph 146(8.2)(c)(ii), we are of the view that a contextual interpretation should be used. Thus, unless otherwise specified in the Act, it is our view that where a provision of Part I of the Act refers to a notice of assessment, that provision necessarily refers to a notice of assessment under Part I of the Act and not to a notice of assessment under any other part of the Act. This interpretation is consistent with that expressed in 9911615 which you quote in your letter. We understand that the CRA's interpretation has been accepted by the courts in various cases. (endnote 1)
We hope that our comments are of assistance.
Best regards,
Ghislain Martineau
Manager
Financial Sector and Exempt Entities Section
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch.
ENDNOTES
1 See inter alia: McNamee v. Her Majesty the Queen, 2009 TCC 630