5-903422
Dear Sirs:
This is in reply to your facsimile transmission of December 5, 1990 in respect of the withdrawal of undeducted past service additional voluntary contributions (AVC's) from an RRSP to which the contributions were previously transferred.
It is our understanding that you discussed your concerns to your satisfaction with Ms. Shea-DesRosiers of our office on December 13, 1990. However, to reiterate, the Income Tax Act does not provide any means by which past service AVC's may be withdrawn from an RRSP without tax being withheld at source. Instead, paragraph 60.2(1)(A) of the Act provides that such withdrawals may be deducted in a year before 1991 provided they meet the requirements set out in the section. That is, if an amount received from an RRSP represents a refund of undeducted past service AVC's made by a taxpayer to an RPP before October 9, 1986, and the refund is received on or before December 31, 1990, the taxpayer may claim a deduction in computing his income for the year of receipt or in a subsequent year ending before 1991.
We trust this clarifies our position in this matter.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate