DATE: July 2, 1986
Assessing Division C.F.V. Wilkie Division Director
FROM - Financial Industries Division Peter K. Noack 995-0051
ATTENTION C. Fanset
RE: CFSA and RCMPSA Pension Repayment
This is in reply to your memorandum of May 2 concerning pension repayments under the Canadian Forces Superannuation Plan and the Royal Canadian Mounted Police Superannuation Plan in return for entitlement to benefits under the Public Service Superannuation Act.
You have been advised by our Division that the excess of the repayments made in the year or within 60 days after the end of the year over the portion Of the repayments deductible for the year under subparagraph 8(1)(m)(iii) of the Income Tax Act (the "Act") may be deducted as a contribution to a,registered pension plan under paragraph 60(j) of the Act to the extent of pension income received in the year and included in income for the year under subparagraph 56(1)(a)(i) of the Act.
You question the deductibility of the excess amounts under paragraph 60(j) of the Act, because subsection 8(8) of the Act permits the excess to be deducted in subsequent years.
Subsection 8(8) of the Act specifically excludes the deduction of amounts that were deducted under paragraph 60(j) of the Act for preceding taxation years. Towards the end the subsection reads:
"to the extent that it exceeds the aggregate of amounts deductible in respect thereof under this subsection, subparagraph (1)(m)(ii) or (iii) or paragraph 60(j) of the Act in computing incomes for years preceding the taxation year."
Therefore, the carry forward provisions in subsection 8(8) of the Act do not prevent the deduction under paragraph 60(j) of the Act of an amount for a year that was not deductible under paragraph 8(1)(m) of the Act for that year.
Director Financial Industries Division Rulings Directorate Legislative and Intergovernmental Affairs Branch