Principal Issues: Whether a Jersey retirement plan satisfies the pension plan condition in subparagraph 60(j)(i) of the Act.
Position: No.
Reasons: No employer contributions were made to the plan, and therefore it does not have the characteristics of a pension plan under the Act.
XXXXXXXXXX 2017-072072 V. Pietrow April 12, 2018
Dear XXXXXXXXXX:
Re: Transfer of a Jersey Retirement Plan to an RRSP
We are writing in response to your email dated September 1, 2017, in which you asked whether you can transfer funds from a Jersey retirement plan to a registered retirement savings plan (“RRSP”) on a tax-deferred basis under the Income Tax Act (the “Act”). We also acknowledge the additional information sent in further email exchanges.
We understand the facts to be as follows: You have a “self-invested pension plan” under Jersey legislation (“SIPP”) that is held jointly with your spouse. In order to set up your SIPP, a Jersey company (the “SIPP Company”) was formed and you and your spouse, as annuitants, entered into a Retirement Annuity Contract with the SIPP Company that was approved by the Jersey Comptroller of Taxes. You and your spouse made direct contributions to your SIPP, as well as transfers to it from XXXXXXXXXX legacy employer schemes relating to employment positions in Europe. The SIPP Company invested the funds of your SIPP. You would like to transfer your respective share of the amount in your SIPP to an RRSP upon becoming a Canadian resident.
Our comments
This technical interpretation provides general comments about the provisions of the Act and related legislation. It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination. The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R7, Advance Income Tax Rulings and Technical Interpretations.
As noted in ¶26 of Interpretation Bulletin IT-528 - Transfers of Funds Between Registered Plans, subparagraph 60(j)(i) of the Act allows a deduction for the transfer of an amount from a foreign pension plan to an RRSP provided certain conditions are met. One of the conditions is that the foreign plan be a pension plan for the purposes of the Act.
The determination of whether a plan is a pension plan is a question of fact. Generally, a plan will be considered to be a pension plan under the Act where contributions have been made to the plan by or on behalf of an employer or former employer of an employee in consideration for services rendered by the employee and the contributions are used to provide an annuity or other periodic payment on or after the employee’s retirement.
Given the information you provided that no employer contributions were made to your SIPP, it would not be considered a pension plan for the purpose of the Act and therefore no deduction under subparagraph 60(j)(i) would be available.
We trust these comments will be of assistance to you.
Yours truly,
Dave Wurtele
Acting Section Manager
for Division Director
Financial Industries and Trusts Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch