| 922097 | |
| 24(1) | Glen Thornley |
| (613) 957-2101 |
Attention: 19(1)
August 17, 1992
Dear Sirs:
Re: Registered Retirement Savings Plan ("RRSP") and Status Indians
This is in reply to your letter of June 29, 1992 asking whether payments received out of an RRSP by a Status Indian are considered exempt income to the Status Income.
Our Comments
In order for a payment to be non-taxable to a Status Indian it must be personal property of the Indian on a reserve. In this respect payments under an RRSP are considered sourced at the head office of the financial institution that issued them and are, therefor, not sourced on a reserve unless, of course, the head office of the financial institution (credit union, trust company, etc) happens to be situated on a reserve. Where this is the case the RRSP payments would be considered as personal property of an Indian on a reserve and exempt from taxation by virtue of section 87 of the Indian Act and paragraph 81(1)(a) of the Income Tax Act.
Additionally, RRSP payments are not covered by the Indian Remission Order as the Order refers only to a superannuation or pension benefit under a registered pension fund or plan. An RRSP is a savings plan not a superannuation or pension plan or fund.
The foregoing represents the Department's present understanding of the law and does not take into consideration the recent decision of the Supreme Court of Canada in the Glenn Williams case (92 DTC 6320). This decision may call into question the rationale for the earlier decision of the Supreme Court in Nowegijick (83 DTC 5041). The impact of Glenn Williams on these issues is under review by the Departments of Justice and Finance, as well as by this Department. We anticipate this review will take some time to complete. In the meantime the Department's position on the taxation of Indians will be maintained except in cases similar to Glenn Williams (i.e. unemployment insurance benefits received by a status Indian where the qualifying employment income was exempt under the Indian Act.)
We trust our comments will be of assistance to you.
Yours truly,
E. Wheelerfor DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch