| August 10, 1990 | |
| Registered Plans Division | Financial Industries Division |
| Room 4038 | D. Duff |
| 400 Cumberland Street | 957-3498 |
| Attention: Alec Buchanan | |
| 901490 | |
| EACC9334 | |
| Subject: Your file HAV8282-0121 19(1) RRSP |
This is in response to your Round Trip memorandum of July 3, 1990, regarding the letter of February 12, 1990 from 19(1)
According to his letter, 24(1)
Subsection 79B(2) of the Income Tax Act, as it read in 1969, indicated that a plan would not be accepted for registration if it provided for the payment of a benefit before maturity. If the plan was subsequently amended so that it did not comply with the registration requirements, paragraph 79B(8)(a) of the 1969 Act deemed the amended plan not to be a RRSP and paragraph 79B(8)(b) required the annuitant to include in income all amounts received in the year. Subsection 79B(8) became subsection 146(12) in the revised Act and, effective May 25, 1976, paragraph (b) was amended to include in income an amount equal to the fair market value of all of the assets in the plan at the time of deregistration. However, for those plans deregistered before May 26, 1976, the old rule, requiring the annuitant to report only amounts received remains in effect. This is discussed in Interpretation Bulletin IT-415R. Paragraph 5 therein indicates that the trust, assuming it continues to exist, comes under the provisions of subdivision k, Division B, of the Act and section 146 no longer applies, except for subsection 146(12). 23
24(1)
24(1)
21(1)(a)
Regarding 19(1) other comments, we can find no reference to a capped plan or to the change in the Act in 1973 requiring dividends to be held in the plan. Also there are no provisions for repaying amounts incorrectly paid out of a RRSP.
We trust our comments will be of assistance.
Wayne Douglas ChiefDeferred Income Plans and Trust SectionFinancial Industries Division Rulings Directorate