10 August 1990 Ministerial Letter EACC9228 F - Annual Review of Form T2033: Record of Direct Transfer of RRIF Funds

SUBJECT: Annual Review of Form T2033 Record of Direct Transfer - Under Subsection 146(16) or Paragraph 146.3(2)(e)

We have reviewed the above-noted form for technical accuracy.

Our review and comments in the attached appendix are based on the provisions of the Income Tax Act proposed under Bill C-52 which received Royal Assent on June 27, 1990.  Unless otherwise indicated, the references to sections, subsections, etc. are to the Income Tax Act.

If you have any questions, please contact us.

Bernhard BuetowChiefTechnical Review SectionTechnical Publications DivisionLegislative Affairs Directorate

Part I

1.     Item 1(a) - We suggest that "and" be changed to "or" in the bracketted phrase unless it is a common occurrence that a portion of the same direct transfer from an RRSP is transferred to another RRSP as well as a RRIF and an RPP.

2.     Item 2 - Unlike subsection 146(16), paragraph 146.3(2)(e) does not provide for a RRIF to be amended.  Rather, it is one of the  payments the RRIF must provide for before it can be registered.  We suggest changing "amend the funds as permitted by paragraph 146.3(2)(e)" to "pursuant to paragraph 146.3(2)(e)".

3.     Item 3 - Since three types of plans are set out under (a), (b) and (c), the bracketted phrase under line 1 should refer to all three plans, i.e., "(Name of RRSP Issuer, RRIF Carrier or Registered Pension Plan (RPP) Administrator Identified below)".

4.     Form T2033 needs a Privacy Act Bank of Information Number which should be noted on the form.

Other changes are indicated by an asterisk on the mock-up copy.

- INSTRUCTIONS -

For use by:

(a)     the issuer of an unmatured RRSP to effect a direct transfer of  all or part of the property of the unmatured plan as permitted by subsection 146(16) to

(i)     the issuer of another RRSP having the same annuitant,

(ii)     the carrier of a RRIF having the same annuitant, or 

(iii)     the administrator of a registered pension plan for credit to the account of the annuitant as a member under that plan, or

(b)     the carrier of a RRIF to effect a direct transfer of all or part of the property of the fund to the carrier of another RRIF having the same annuitant as permitted by paragraph 146.3(2)(e).

(Note: Form T2220 is to be used for direct transfers from RRSPs or RRIFs due to the breakdown of a marriage or other conjugal relationship).

This form is not required if:

(i)     both plans involved are RRSPs or RRIFs or the transfer is from an RRSP to a RRIF and the issuer of  the two plans or the issuer and carrier of the plan and fund are the same person; and

(ii)     satisfactory internal arrangements have been made to record under the recipient plan or fund the information that otherwise would be supplied on this form.

This form is not to be used if there is:

(i)     a direct transfer of full or partial commutation of an RRSP annuity to another RRSP or RRIF

(ii)     a direct transfer of RRIF property to an RRSP

(See Form T2030 Notice of Direct Transfer under subparagraph 60(1)(v)).

-     Part I of all copies is to be completed and signed by the annuitant who is requesting the direct transfer (the Applicant). All copies are to be given to the RRSP issuer, the RRIF carrier or the RPP administrator to which the property is to be transferred (the Transferee) If the Transferee completes Part I on behalf of the Applicant, a copy of a signed letter from the Applicant requesting the direct transfer may be attached to each copy instead of such signature.

-     Part II of all copies is to be completed and signed by the Transferee. All copies are then to be sent to the RRSP issuer or RRIF carrier from which the property in to be transferred (the Transferor).

-      Part III of all copies is to be completed and signed by the Transferor who shall keep Copy 4 and send Copies 1, 2 and 3 to the Transferee along with the funds or property being transferred.

-      Part IV of Copies 1, 2 and 3 is to be completed and signed by the Transferee. Copy 1 is to be returned to the Transferor, Copy 2 given to the annuitant and Copy 3 kept by the Transferee.

DEFINITIONS

-     "Individual Plan No." and "Individual Fund No." means the individual account, contract, certificate or other identifier number assigned by the RRSP issuer or RRIF carrier. 

-      "RRSP issuer" means a person described in paragraph 146(1)(3).  This includes a duly appointed agent of such a person.

-      "RRIF carrier" means a person described in paragraph 146.3(1)(b). "RPP administrator" means the person or body of persons resident  in Canada that has ultimate responsibility for the administration of the plan.

-      Subsections, paragraphs and subparagraphs referred to on this form are references to the Income Tax Act.

REPORTING

A direct transfer described in the initial instruction does not cause the amount transferred to become income of the annuitant for the taxation year and such amount is not to be reported on forms T4RSP or T4RIF. An official receipt for purposes of deducting the amount directly transferred is not to be issued by the Transferee.

NOTES

A RRIF carrier that effects a direct transfer in accordance with paragraph 146.3(2)(e) is required to pay to the annuitant the "minimum amount" for the year. Therefore, the carrier must retain sufficient property to ensure that the "minimum amount" required to be paid for the year is paid.

Income tax is not required to be withheld from the amount directly transferred and form TD2, Tax Deduction Waiver in Respect of Funds to be Transferred, is not required regardless of whether form T2033 is used.

Any questions regarding the use of this form should be directed to your local District Taxation Office.