Peter K. Noack (613) 995-0051
August 6, 1986
Dear XXXX
This is in reply to your letter of May 20, 1986, concerning current service contributions to the XXXX in respect of years before 1986 that exceeded the $3,500 annual limit and were, therefore, not deductible from your income. Draft legislation in the form of a Notice of Ways and Means Motion making such contributions fully deductible applicable in 1986 and subsequent taxation years was tabled in the House of Commons on June 11, 1986.
Where current service contributions have been made by a taxpayer to a registered pension plan in excess of the amount deductible for the year, the excess may be deducted from the income of subsequent years subject to the annual limit of $3,500 minus any amounts deductible as current or past service contribution for the subsequent year. This means that you will be able to deduct your excess contributions from your pension income at the rate of $3,500 a year assuming you are not making any payments to another pension plan after retirement from your present employment.
The carry forward of pension contributions for deduction in a subsequent year is expressly permitted under subsection 8(8) of the Income Tax Act.
Yours truly,
for Director Financial Industries Division Rulings Directorate Legislative and Intergovernmental Affairs Branch