A. Humeniuk
(613) 957-2135 19(1)
October 31, 1989
Dear Sir:
Re: Transfer of Unused Credits to Spouse
We are responding to your letter of August 29, 1989,
concerning the transfer of the unused portion of your
pension tax credit to your spouse. As you did not provide us with sufficient detail
concerning your return, we are unable to provide a
response specific to your situation. However, we would
like to provide the following general comments
concerning such transfers which may be of assistance to
you. As we understand your situation, you have an eligible
pension tax credit as determined in paragraphs 2 to 5 of
the attached Interpretation Bulletin IT-517
"Pension Tax
Credit". Your taxable income is nil, and thus your
pension tax credit is not required to reduce ordinary
tax payable to nil. However, you do have alternative
minimum tax payable. Since minimum tax cannot be
reduced by means of the pension tax credit, you are
unable to use your credit. You have asked whether this
credit, which has not been used to reduce tax payable
for either ordinary or minimum tax purposes, can be
transferred in full to your spouse. As stated in paragraph 8 of IT-517
, the pension tax
credit as well as other eligible tax credits are
available for transfer to an individual's spouse.
However, the amount to be transferred to the spouse is
reduced by the amount of federal tax payable by the
individual (whether calculated in the ordinary manner or
as a minimum tax) computed without reference to any tax
credit other than the Unemployment Insurance Premium Tax
Credit, the Canada Pension Plan Tax Credit and the
Personal Tax Credit available to a single individual
under paragraph 118(1)(c) of the Income Tax Act. This
is so despite the fact that minimum tax cannot be
reduced by the pension tax credit otherwise available. Accordingly in the example you have given, only that
portion of the transferrable credits which exceeds the
minimum tax payable (computed without reference to any
tax credit other than the Unemployment Tax Credit,
Canada Pension Plan Tax Credit and the Basic Personal
Tax Credit) can be transferred to your spouse. If you have a specific concern with the calculation of
the tax credits for your return or for that of your
spouse, you may wish to contact the Ottawa District
Taxation Office located at 360 Lisgar Street, Ottawa,
K1A 0L9. Please note that authorization from your
spouse is required should you be acting on her behalf. Yours truly,
P.D. Fuoco
for Director
Business and General Division
Specialty Rulings Directorate
Legislative and Intergovernmental
Affairs Branch Enclosure
