5-910955
19(1)
This is in reply to your letter of March 30, 1991 concerning a lump-sum amount you expect to received in 1991 under
24(1)
The Department does not provide confirmations of the income tax implications inherent in a specific proposed transaction other than in the context of an advance income tax ruling, for which there is fee of $80 per hour. The following comments are therefore of a general nature only.
An amount received under a foreign pension plan would normally be included in income under subparagraph 56(1)(a)(i) of the Income Tax Act (the "Act"). Where such amount is so included in the recipient's income and
(a) is received in one lump-sum payment (i.e. it is not part of a series of periodic payments), and
(b) is attributable to services rendered by the recipient, or his spouse or former spouse, in a period throughout which such person was not resident in Canada,
a deduction is available under paragraph 60(j) of the Act where that amount is contributed to the recipient's registered retirement savings plan ("RRSP"). The amount of the paragraph 60(j) is limited to the difference between the amount of the pension payment and any amount deducted under subparagraph 110(1)(f)(i) of the Act in respect thereof.
It is not necessary that the relevant funds be transferred directly to the RRSP by the foreign pension authorities. The funds can be paid directly to the person who is entitled to them and the above- mentioned deduction under paragraph 60 (j) of the Act is available where the recipient contributes those funds to his RRSP in the year of receipt or within 60 days thereafter.
The above comments are an expression of opinion only and are not binding on the department. We trust however that they are of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch