| 24(1) | 5-920959 |
| P. Spice | |
| (613) 957-8953 |
Attention:19(1)
April 24, 1992
Dear Sirs:
Re: 24(1) Application of Paragraph 60(j.2) of the Income Tax Act (the "Act")
This is in reply to your letter of March 26, 1992, in which you ask whether the above-noted provision of the Act will permit members to roll-over their periodic pension income to a spousal registered retirement savings plan (RRSP). Retired members of the Plan may purchase an immediate life annuity with the actuarial value of their pension upon retirement, and you wish to know if payments under such a life annuity would be considered payments under the registered pension plan, thus qualifying for the paragraph 60(j.2) deduction.
Section 254 of the Act will apply to deem payments out of an annuity to be payments out of a registered pension plan if the rights provided for in the annuity are rights provided for in the registered pension plan. Where a pension plan contains a clause, similar to the one described in your letter, permitting members to purchase an annuity with the actuarial value of their pension, this is usually regarded as meeting the condition in section 254.
Written confirmation of the tax implications inherent in particular transactions are given by this Directorate only where the transactions are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R2. Where the particular transactions are completed, the enquiry should be addressed to the relevant District Taxation Office. The foregoing comments are, therefore, of a general nature only, and are not binding on the Department.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate