XXXX Peter K. Noack (613) 995-0051
September 19,1986
Dear XXXX
This is in reply to your letter of August 6 concerning contributions to spousal RRSPs. Our understanding of the facts giving rise to your enquiry is as follows:
During the first 60 days of 1983, you made your first contribution to a spousal RRSP. The contribution was deducted from your income for 1982.
In January 1985 the funds in that RRSP were withdrawn. On Saturday, March 1, 1986, you made a contribution to a new spousal RRSP. You were informed by the Toronto District Office that subsection 146(8.3) of the Income Tax Act (the "Act") would operate to include the January 1985 withdrawal in your income for 1985 and that reassessments of your and your wife's returns would be forthcoming.
You now propose that your wife withdraw the funds from the second spousal RRSP opened in March 1986, and you request confirmation that the withdrawal will be taxed in the hands of your wife under paragraph 146(12)(b) of the Act and that subsection 146(8.3) of the Act will not apply by virtue of subsection 146(8.6) of the Act to include the withdrawal in your income.
We agree that the amount that will be included by reassessment in your income for 1985 in respect of your March 1, 1986 contribution to the spousal plan will not again be included in your income for 1986. Subsection 146(8.6) of the Act provides that where an amount in respect of all or part of a deductible contribution to the spouse's registered retirement savings plan has once been included in the taxpayer's income, no part of that amount will again be included.
Yours truly,
for Director Financial Industries Division Rulings Directorate Legislative and Intergovernmental Affairs Branch