Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Whether payments from a deferred salary retirement plan for teachers in XXXXXXXXXX can be transferred tax-free to RRSPs?
Position TAKEN:
We have been unable to find the ruling the author referred to in his letter. If the plan is a deferred salary leave plan as described in 6801(b), no tax-free transfer to RRSPs.
Reasons FOR POSITION TAKEN:
No provision of the Act permits such transfer.
5-950291
XXXXXXXXXX Robert Gagnon
Attention: XXXXXXXXXX
April 5, 1995
Dear Sirs:
Re: Transfer to RRSP
This is in reply to your letter of December 21, 1994 wherein you requested a technical interpretation addressed to the Registered Plan Division. Your request has been forwarded to the Income Tax Rulings and Interpretation Directorate for reply. We apologize for the delay in replying.
We have been unable to find the ruling you referred to in your letter. Accordingly, we cannot provide you with an opinion with respect to the plan mentioned in your letter without knowing more details. However, if it is a deferral salary leave plan as described in paragraph 6801(b) of the Income Tax Regulations ("Regulations"), amounts paid under the plan cannot be transferred tax-free to a registered retirement savings plan.
A deferred salary leave plan pursuant to paragraph 6801(b) of the Regulations is an arrangement between an employer and an employee that has been established before July 28, 1986 (and not materially revised since that date) where it is reasonable to conclude from a review of all the circumstances that the arrangement was not established to provide benefits on or after retirement and, furthermore, that the main purpose of the arrangement was to fund, through salary deferrals, a leave of absence from the employment. Lastly, the salary deferrals must have commenced before 1987.
The foregoing opinions are not rulings and, in accordance with the guidelines set out in Information Circular 70-6R2 dated September 28, 1990, are not binding on the Department.
We trust our comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretation Directorate
Policy & Legislation Branch
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