R. Nanner (613) 957-8960 September 26, 1986
Dear Sirs:
Re: Registered Retirement Savings Plan ("R.R.S.P.") - Notice of Seizure
This is in reply to your letter of July 17, 1986 requesting our opinion on the implications of a Notice of Seizure served on you as an administrator/ trustee of an R.R.S.P.
You have advised us that the taxpayer's wife was awarded a court settlement of $2,500 per month for support. In this regard the support payments are to be made from funds which are presently in the taxpayer's R.R.S.P.
If payment is to be made directly from the R.R.S.P., this will result in a deregistration of the entire plan. It will be necessary, as you indicated, to set up another plan, transfer the required funds thereto and deregister the new plan.
We would like to point out that in the Notice of Ways and Means Motion to amend the Income Tax Act (the "Act") tabled in the House of Commons on June 11, 1986, it was proposed to allow an R.R.S.P. to make payments to the annuitant any time before its maturity. The House was prorogued before the motion was passed however, it is possible that this motion will be reintroduced when House convenes.
We are unable to provide you with comments concerning the other issues raised in your letter as they do not pertain to matters of income taxation.
We hope this is of assistance to you.
Yours truly,
for Director Financial Industries Division Rulings Directorate Legislative and Intergovernmental Affairs Branch