5-903692
Dear Sirs:
Re: Registered Retirement Savings Plans (RRSP) - Beneficial Interest
This is in reply to your letter of December 17, 1990 wherein you requested clarification with respect to certain of the RRSP registration requirements as described in section 146 of the Income Tax Act (the "Act").
As noted in Information Circular 70-6R2, we do not express opinions on specific proposed transactions other than as a reply to an advance income tax ruling request. As a consequence thereof, we may only offer the following general comments.
Subsection 146(12) of the Act states that if an RRSP is revised, amended or a new plan substituted for it and as a result the amended plan does not comply with subsection 146(2) of the Act, then the plan shall be deemed not to be registered and the annuitant shall include in income an amount equal to the fair market value of the plan's property immediately before the date of deregistration.
Subsection 146(13) of the Act provides that a new plan is deemed to be substituted for an existing plan and as such subsection 146(12) will apply in the following cases:
1. if a right or obligation is released or extinguished either wholly or in part, either in exchange or substitution for some other right or obligation, unless the sole object is to revise or amend the plan, and
2. the rights under the plan are pledged as security of a loan or other payment.
Based on the two cases in your letter it is a question of fact whether or not they would meet subsection 146(13) which would cause the RRSP to be deregistered.
We trust the above comments will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate