After a UK resident (under age 55) became resident in Canada, the commuted value of the individual’s member benefits under a UK defined-benefit pension plan was transferred directly to a UK self-invested personal pension plan (SIPP) of which the individual was the sole beneficiary.
In finding that such commuted value was to be included at the time of the transfer in the individual’s income pursuant to s. 56(1)(a)(i), CRA indicated that there was constructive receipt of the commuted value by the individual on the transfer - and further found, in the alternative, that s. 56(2) would apply to include the commuted value in the individual’s income on the basis that the individual had directed or concurred in the payment of an amount to a third party (the UK SIPP) and that amount, had it been paid to the individual, would have been included under s. 56(1)(a)(i). This would also mean that the individual had made a “contribution” to the UK SIPP plan.