| 19(1) | File No. 5-8656 |
| F. Francis | |
| (613) 957-3496 |
October 17, 1989
Dear Sirs:
This is in reply to your letter of September 6, 1989, wherein you requested our opinion in respect of a specific proposed transaction concerning a proposed lump sum payment under a registered pension plan to the deceased's estate.
As noted in Information Circular 70-6R, we do not give opinions in respect of specific proposed transactions other than as a reply to an advance income tax ruling request. However, we will offer the following general comments.
Subsection 104(27) of the Income Tax Act (the "Act") permits a testamentary trust to designate, in respect of a particular beneficiary, an amount that would otherwise be included under subparagraph 56(1)(a)(i) of the Act in computing the income of the trust. By virtue of this designation, the pension benefit is deemed for purposes of subsection 104(27) and paragraph 60(j) of the Act to be included in the income of the particular beneficiary under subparagraph 56(1)(a)(i) of the Act and not to be included in the income of the trust. The particular beneficiary would therefore be entitled to transfer his share of the pension benefits to a registered retirement savings plan ("RRSP") under paragraph 60(j) of the Act.
It should be noted that it is the Department's practice to accept the registration of an RRSP for a minor who does not have earned income. Should you wish to follow up this matter we suggest that you provide all details of your particular situation to our Registration Directorate.
We trust the above comments will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate