14 November 1996 External T.I. 9635985 - TRANSFERS OF PROPERTY BETWEEN REGISTERED PLANS

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 transfer from RRSP to RRIF or from RRIF to RRIF occurs at fair market value.

Position:

Yes it does.

Reasons:

	Would be a disposition/acquisition which always occurs 	at fair market value.

XXXXXXXXXX							963598

Attention: XXXXXXXXXX

November 14, 1996

Re: Transfer of Property from Registered Retirement
Savings Plan Trust ("RRSP") to Registered
Retirement Income Fund Trust ("RRIF")

This is in reply to your letter of October 22, 1996, in which you ask three questions concerning the issue of whether a disposition and acquisition of property occurs, and thus the cost recorded at fair market value, when the property is transferred from an RRSP to a RRIF and from a RRIF to a RRIF. You refer to paragraph 12 of Interpretation Bulletin IT-412R and our technical interpretation of April 28, 1995 (E9501905).

Please note that the Directorate has issued several interpretations on this topic besides the one referred to above. In particular, our interpretation of September 20, 1995 (E9518815) addresses the issue of the transfer of property from an unmatured RRSP to a RRIF and in it we conclude that all transfers between registered plans must be recorded at fair market value. The only exception is as described in the above-noted Interpretation Bulletin which clearly refers to a transfer of all of the property from one self-administered RRSP to another and, therefore, does not apply to a partial transfer between RRSP's or to partial or total transfers of property between other kinds of registered plans.

You may also wish to refer to our technical interpretation of July 12, 1993 (E9316655) which discusses the various provisions in the Income Tax Act which require that transfers between registered plans occur at fair market value.

Copies of severed versions of our technical interpretations are available at most Tax Services Offices (please refer to the blue pages of the telephone directory) or from the Directorate. Depending on the number of pages requested, there may be a charge for handling such a request. We trust our comments will be of assistance to you.

Yours truly,

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