CRA confirmed that a joint s. 60.03(1) election can be made by a pensioner (Mrs.) and a pension transferee (Mr.) in the situation where the pensioner become a bankrupt, say, on June 1, 2015 or, alternatively, the pension transferee became bankrupt on that date.
CRA noted that s. 128(2) does not exclude the joint s. 60.03 election, nor the inclusion or deduction under ss. 56(1)(a.2) and 60(c). Because the split-pension election relates to the 2015 taxation year, it is possible for pensioner and a pension transferee to jointly elect for each of her or his pre-bankruptcy and post-bankruptcy taxation years, providing the conditions stated in section 60.03 are met. The split-pension amounts deducted in the pensioner’s returns filed for her pre-bankruptcy and/or the post-bankruptcy taxation year(s) under s. 60(c) should be reported as income on the pension transferee’s return for calendar 2015 under s. 56(1)(a.2). If it is the pension transferee who became bankrupt, the split-pension amount deducted by the pensioner should be apportioned between the pre-bankruptcy and the post-bankruptcy taxation years of the pension transferee, based on the eligible pension income received in each such taxation year. In such a situation, the split-pension amount that relates to the post-bankruptcy taxation year of the pension transferee will generally be reported on the return filed by him as bankrupt under s. 128(2)(f).