DATE September 25, 1986
TO W.G. Pembroke A/Chief Research & Enquiries Section Source Deductions Division
FROM - Financial Institutions Section R. Nanner 957-8960
RE: Re: Bulk Transfer of Funds from an Employer-Controlled Benefit Plan to a Group RRSP.
This is in reference to your memorandum dated July 8, 1986 requesting our opinion on the reporting requirements as they pertain to bulk transfer of funds from an employer-controlled pension plan to a group RRSP.
Subparagraph 56(1)(a)(i) of the Income Tax Act (the "Act") requires the inclusion of pension benefits received by the taxpayer in his income for the year. The taxpayer is allowed a deduction to the extent amounts included in his income pursuant to subparagraph 56(l)(a)(i) of the Act are transferred into other pension plans in accordance with paragraph 60(j) of the Act.
Accordingly, as requested, we hereby confirm that the taxpayer must report the income notwithstanding that he may claim a deduction of an equivalent amount as opposed to not reporting the income at all.
As to whether the requirement for individual Forms TD2 and T4A should be waived in favour of an alternative procedure is a matter that should be discussed with Verifications and Collections, Assessing Division and Audit Directorate.
for Director Financial Industries Division Rulings Directorate Legislative and Intergovernmental Affairs Branch