CRA indicates that the advantage rules apply where in substance annuitants have transferred employment income to their RRSP under a mortgage loan by it to them

S. (b)(ii)(A) of the definition of “advantage” in s. 207.01(1) refers to a benefit that is an increase in the total FMV of the property held in connection with an RRSP if it is reasonable to consider, having regard to all the circumstances, that the increase is attributable, directly or indirectly, to a payment received as, on account or in lieu of, or in satisfaction of, a payment for services provided by a person who is, or who does not deal at arm’s length with, the controlling individual of the registered plan. Regarding whether the borrowing by the controlling individual of an RRSP under a mortgage loan from that RRSP on commercial terms substantially similar to those between Canadian arm's length parties results in an “advantage” pursuant to s. 207.01(1)(b)(ii)(A) of the definition thereof. CRA stated:

Subparagraph (b)(ii) of the definition of “advantage” in subsection 207.01(1) targets arrangements that attempt to artificially shift otherwise taxable amounts into a registered plan. For example, where employment income of a controlling individual of an RRSP is replaced or the quantum of such employment income is reduced, there may be an artificial shift of taxable income into the RRSP. In determining whether a payment to a registered plan has been received in substitution for a payment for services rendered, the economic substance of the related transactions regardless of their legal form have to be considered.

Neal Armstrong. Summaries of 1 June 2026 External T.I. 2023-1001921E5 under s. 207.01(1) – advantage – (b)(ii)(A), (b)(i).