August 10, 1990
Registered Plans Division Financial Industries Division Room 4038 D. Duff 400 Cumberland Street 957-3498
Attention: Alec Buchanan
C-9334
Subject: Your file HAV8282-0121
19(1) RRSPThis is in response to your Round Trip memorandum of July 3, 1990, regarding the letter of February 12, 1990 from
19(1)
According to his letter.
24(1)
Subsection 79B(2) of the Income Tax Act, as it read in 1969,
indicated that a plan would not be accepted for registration if
it provided for the payment of a benefit before maturity. If the
plan was subsequently amended so that it did not comply with the
registration requirements, paragraph 79B(8) (a) of the 1969 Act
deemed the amended plan not to be a RRSP and paragraph 79B(8)(b)
required the annuitant to include in income all amounts received
in the year. Subsection 79B(8) became subsection 146(12) in the
revised Act and, effective May 25, 1976, paragraph (b) was
amended to include in income an amount equal to the fair market
value of all of the assets in the plan at the time of
deregistration. However, for those plans deregistered before
May 26, 1976, the old rule, requiring the annuitant to report
only amounts received remains in effect. This is discussed in
Interpretation Bulletin
IT-415R
. Paragraph 5 therein indicates
that the trust, assuming it continues to exist, comes under the
provisions of subdivision k, Division B, of the Act and section
146 no longer applies, except for subsection 146(12).
23
24(1)
24(1)
21(1)(a)
Regarding 19(1) other comments, we can find no reference to a
capped plan or to the change in the Act in 1973 requiring
dividends to be held in the plan. Also there are no provisions
for repaying amounts incorrectly paid out of a RRSP.We trust our comments will be of assistance. Wayne Douglas Chief Deferred Income Plans and Trust Section Financial Industries Division Rulings Directorate