5-910795
Dear Sirs:
Re: 24(1)
This is in reply to your letter of March 14, 1991, concerning the treatment of split registered pension benefits on a marriage breakdown under the Manitoba Pension Benefits Act.
As provided in subparagraph 12(a) of Information Circular 72-13R8, no right or interest can be assigned or alienated except as required or permitted under the Income Tax Act, or a provincial pension benefits act, or in the event of a splitting of accrued pension benefits on or after the breakdown of a marriage pursuant to a decree, order or judgement of a competent tribunal or in accordance with a written separation agreement relating to a division of property between the member and the member's spouse or former spouse in settlement of rights arising out of their marriage.
Accordingly there can be no transfer other than those provided for above and in the way stipulated.
In the situation you refer to, the transfer is made pursuant to a provision of a provincial pension benefits act which stipulates a transfer of the pension benefits of the member spouse to a locked-in RRSP of the non-member spouse. No other option is allowed. The transfer must be made according to the stipulation of the provincial act.
As far as the Income Tax Act is concerned, Subsection 147.3(5) permits the direct transfer of a lump sum amount from one RPP to another or to an RRSP for the benefit of the spouse or former spouse of a plan member, where the amount is transferred pursuant to a court order or written agreement relating to a division of property on marriage breakdown.
Paragraph 146(16) of the Income Tax Act permits a transfer from a taxpayer's RRSP to an RRSP or RRIF of his or her spouse or former spouse pursuant to a court order or written separation agreement on a marriage breakdown.
Only those transfers above referred to are permitted to a taxpayer under the Income Tax Act. No other option is provided for.
Furthermore, a taxpayer cannot repay the fund for amounts transferred to the spouse.
We trust the above comments will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch