29 November 1995 External T.I. 9531155 - RETIRING ALLOWANCE RRSP ROLL

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:

general info on retiring allowance and rollover to a RRSP.

Position:

Routine comments

Reasons:

successive employers are related and amount shelterable is $2,000 per year.

Treasury Board of Canada
L'Esplanade Laurier		953115
5th Floor, West Tower	M.P. Sarazin
300 Laurier Avenue West
Ottawa, Ontario
K1A 0R5

Attention: Huguette Messier

November 29, 1995

Re: Retiring Allowances and XXXXXXXXXX

In response to your request of November 28, 1995, we hereby confirm:

In determining the number of years of employment with an employer for the purposes of calculating the amount of a retiring allowance that can be transferred to a RRSP, employment with any person whose business was acquired or continued by the employer who is paying the retiring allowance is also included. This is pursuant to subparagraph 60(j.1)(iv) of the Income Tax Act.

Where the employer contributes to either a registered pension plan or a deferred profit sharing plan in respect of the employee, the shelterable amount is limited to $2,000 for each year of employment. In the Amendments to the Income Tax Act and Related Statutes: Draft Legislation and Explanatory Notes issued by The Honourable Paul Martin, P.C., M.P. Minister of Finance in July of 1995, draft legislation has been proposed to limit the shelterable amount to $2,000 for each year of service before 1996. The proposed legislation applies to any retiring allowances paid in 1996 or subsequent taxation years.

We trust the above comments will be of assistance to you.

Yours truly,

for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch