PART IIncome Tax (continued)
DIVISION BComputation of Income (continued)
SUBDIVISION EDeductions in Computing Income (continued)
60.001[Repealed, 2013, c. 40, s. 27]
- [NOTE: Application provisions are not included in the consolidated text
- see relevant amending Acts and regulations.]
- R.S., 1985, c. 1 (5th Supp.), s. 60.001
- 2013, c. 40, s. 27
Previous Version
Marginal note:Eligible amount
60.01For the purpose of paragraph 60(j), the amount, if any, by which
(a)the amount of any payment received by a taxpayer in a taxation year out of or under a foreign retirement arrangement and included in computing the taxpayer’s income because of clause 56(1)(a)(i)(C.1) (other than any portion thereof that is included in respect of the taxpayer for the year under subparagraph 60(j(i) or that is part of a series of periodic payments)
exceeds
(b)the portion, if any, of the payment included under paragraph 60.01(a) that can reasonably be considered to derive from contributions to the foreign retirement arrangement made by a person other than the taxpayer or the taxpayer’s spouse or common-law partner or former spouse or common-law partner,
is an eligible amount in respect of the taxpayer for the year.
- [NOTE: Application provisions are not included in the consolidated text
- see relevant amending Acts and regulations.]
- 1994, c. 7, Sch. II, s. 35, Sch. VIII, s. 21
- 2000, c. 12, s. 142
- 2001, c. 17, s. 239(F)
Meaning of lifetime benefit trust
60.011(1)For the purpose of subsection (2), a trust is at any particular time a lifetime benefit trust with respect to a taxpayer and the estate of a deceased individual if
(a)immediately before the death of the deceased individual, the taxpayer
(i)was both a spouse or common-law partner of the deceased individual and mentally infirm, or
(ii)was both a child or grandchild of the deceased individual and dependent on the deceased individual for support because of mental infirmity; and
(b)the trust is, at the particular time, a personal trust under which
(i)no person other than the taxpayer may receive or otherwise obtain the use of, during the taxpayer’s lifetime, any of the income or capital of the trust, and
(ii)the trustees
(A)are empowered to pay amounts from the trust to the taxpayer, and
(B)are required — in determining whether to pay, or not to pay, an amount to the taxpayer — to consider the needs of the taxpayer including, without limiting the generality of the foregoing, the comfort, care and maintenance of the taxpayer.
Meaning of qualifying trust annuity
(2)Each of the following is a qualifying trust annuity with respect to a taxpayer:
(a)an annuity that meets the following conditions:
(i)it is acquired after 2005,
(ii)the annuitant under it is a trust that is, at the time the annuity is acquired, a lifetime benefit trust with respect to the taxpayer and the estate of a deceased individual,
(iii)it is for the life of the taxpayer (with or without a guaranteed period), or for a fixed term equal to 90 years minus the age in whole years of the taxpayer at the time it is acquired, and
(iv)if it is with a guaranteed period or for a fixed term, it requires that, in the event of the death of the taxpayer during the guaranteed period or fixed term, any amounts that would otherwise be payable after the death of the taxpayer be commuted into a single payment;
(b)an annuity that meets the following conditions:
(i)it is acquired after 1988,
(ii)the annuitant under it is a trust under which the taxpayer is the sole person beneficially interested (determined without regard to any right of a person to receive an amount from the trust only on or after the death of the taxpayer) in amounts payable under the annuity,
(iii)it is for a fixed term not exceeding 18 years minus the age in whole years of the taxpayer at the time it is acquired, and
(iv)if it is acquired after 2005, it requires that, in the event of the death of the taxpayer during the fixed term, any amounts that would otherwise be payable after the death of the taxpayer be commuted into a single payment; and
(c)an annuity that meets the following conditions:
(i)it is acquired
(A)after 2000 and before 2005 at a time at which the taxpayer was mentally or physically infirm, or
(B)in 2005 at a time at which the taxpayer was mentally infirm,
(ii)the annuitant under it is a trust under which the taxpayer is the sole person beneficially interested (determined without regard to any right of a person to receive an amount from the trust only on or after the death of the taxpayer) in amounts payable under the annuity, and
(iii)it is for the life of the taxpayer (with or without a guaranteed period), or for a fixed term equal to 90 years minus the age in whole years of the taxpayer at the time it is acquired.
Application of paragraph 60(l) to qualifying trust annuity
(3)For the purpose of paragraph 60(l),
(a)in determining if a qualifying trust annuity with respect to a taxpayer is an annuity described in subparagraph 60(l)(ii), clauses 60(l)(ii)(A) and (B) are to be read without regard to their requirement that the taxpayer be the annuitant under the annuity; and
(b)if an amount paid to acquire a qualifying trust annuity with respect to a taxpayer would, if this Act were read without reference to this subsection, not be considered to have been paid by or on behalf of the taxpayer, the amount is deemed to have been paid on behalf of the taxpayer where
(i)it is paid
(A)by the estate of a deceased individual who was, immediately before death,
(I)a spouse or common-law partner of the taxpayer, or
(II)a parent or grandparent of the taxpayer on whom the taxpayer was dependent for support, or
(B)by the trust that is the annuitant under the qualifying trust annuity, and
(ii)it would, if it had been paid by the taxpayer, be deductible under paragraph 60(l) in computing the taxpayer’s income for a taxation year and the taxpayer elects, in the taxpayer’s return of income under this Part for that taxation year, to have this paragraph apply to the amount.
- [NOTE: Application provisions are not included in the consolidated text
- see relevant amending Acts and regulations.]
- 2013, c. 34, s. 197
Marginal note:Definitions
60.02(1)The definitions in this subsection apply in this section and section 146.4,
- eligible individual
eligible individual means a child or grandchild of a deceased annuitant under a registered retirement savings plan or a registered retirement income fund, or of a deceased member of a pooled registered pension plan, a registered pension plan or a specified pension plan, who was financially dependent on the deceased for support, at the time of the deceased’s death, by reason of mental or physical infirmity. (particulier admissible)
- eligible proceeds
eligible proceeds means an amount (other than an amount that was deducted under paragraph 60(l) in computing the eligible individual’s income) received by an eligible individual as a consequence of the death after March 3, 2010 of a parent or grandparent of the eligible individual that is
(a)a refund of premiums (as defined in subsection 146(1));
(b)an eligible amount under subsection 146.3(6.11); or
(c)a payment (other than a payment that is part of a series of periodic payments or that relates to an actuarial surplus) out of or under a pooled registered pension plan, a registered pension plan or a specified pension plan. (produit admissible)
- specified RDSP payment
specified RDSP payment in respect of an eligible individual means a payment that
(a)is made to a registered disability savings plan under which the eligible individual is the beneficiary;
(b)complies with the conditions set out in paragraphs 146.4(4)(f) to (h);
(c)is made after June 2011;
(d)has been designated in prescribed form for a taxation year by the holder of the plan and the eligible individual at the time that the payment is made; and
(e)if the eligible individual is not a DTC-eligible individual (as defined in subsection 146.4(1)), is made not later than the end of the fourth taxation year following the first taxation year throughout which the beneficiary is not a DTC-eligible individual. (paiement de REEI déterminé)
- transitional eligible proceeds
transitional eligible proceeds of a taxpayer means
(a)any amount (other than an amount that is eligible proceeds or an amount that was deducted under paragraph 60(l) in computing the taxpayer’s income) that is received by the taxpayer as a consequence of the death of an individual after 2007 and before 2011 out of or under
(i)a registered retirement savings plan or registered retirement income fund, or
(ii)a registered pension plan (other than an amount that is received as part of a series of periodic payments or that relates to an actuarial surplus); or
(b)an amount withdrawn from the taxpayer’s registered retirement savings plan or a registered retirement income fund (in this subsection referred to as the “RRSP withdrawal”) if
(i)the taxpayer previously deducted an amount under paragraph 60(l) in respect of an amount that would be described by paragraph (a) if it were read without reference to “other than an amount that is eligible proceeds or an amount that was deducted under paragraph 60(l) in computing the taxpayer’s income”,
(ii)the RRSP withdrawal is included in computing the taxpayer’s income for the year of the withdrawal, and
(iii)the RRSP withdrawal does not exceed the amount deducted under subparagraph (i). (produit admissible transitoire)
Marginal note:Rollover to RDSP on death
(2)There may be deducted in computing the income for a taxation year of a taxpayer who is an eligible individual an amount that
(a)does not exceed the lesser of
(i)the total specified RDSP payments made in the year or within 60 days after the end of the year (or within any longer period after the end of the year that is acceptable to the Minister) in respect of the taxpayer; and
(ii)the total amount of eligible proceeds that is included in computing the taxpayer’s income in the year; and
(b)was not deducted in computing the taxpayer’s income for a preceding taxation year.
Marginal note:Application of subsections (4) and (5)
(3)Subsections (4) and (5) do not apply unless
(a)a taxpayer who was the annuitant under a registered retirement savings plan or a registered retirement income fund or was a member of a registered pension plan died after 2007 and before 2011;
(b)the taxpayer was, immediately before the taxpayer’s death, the parent or grandparent of an eligible individual;
(c)transitional eligible proceeds were received from the plan or fund by
(i)an eligible individual in respect of the taxpayer,
(ii)a person who was the spouse or common-law partner of the taxpayer immediately before the taxpayer’s death, or
(iii)a person who is a beneficiary of the taxpayer’s estate or who directly received transitional eligible proceeds as a consequence of the death of the taxpayer; and
(d)the transitional eligible proceeds were included in computing the income of a person for a taxation year.
Marginal note:Transitional rule
(4)There may be deducted in computing the income of a taxpayer described in paragraph (3)(c) for a taxation year an amount approved by the Minister that does not exceed the lesser of
(a)the total specified RDSP payments made by the taxpayer before 2012, and
(b)the amount of transitional eligible proceeds included in computing the taxpayer’s income for the year.
Marginal note:Transitional rule — deceased taxpayer
(5)There may be deducted in computing the income of a taxpayer for the taxation year in which the taxpayer died an amount approved by the Minister that does not exceed the lesser of
(a)the total specified RDSP payments made before 2012 by an individual described in subparagraph (3)(c)(iii), and
(b)the amount by which the total of all amounts that were included in computing the taxpayer’s income for the year under subsection 146(8.8) or 146.3(6) exceeds the total of all amounts, if any, that were deducted in computing the taxpayer’s income for the year under subsection 146(8.92) or 146.3(6.3).
Marginal note:Limitation
(6)The total amounts that may be deducted under subsections (4) and (5) in respect of transitional eligible proceeds received in respect of the death of a taxpayer shall not exceed the total transitional eligible proceeds received in respect of the deceased taxpayer.
- [NOTE: Application provisions are not included in the consolidated text
- see relevant amending Acts and regulations.]
- 1990, c. 35, s. 5
- 2010, c. 25, s. 11
- 2011, c. 24, s. 12
- 2012, c. 31, s. 13
- 2021, c. 23, s. 9
Previous Version
Marginal note:Additions to clause 60(l)(v)(B.2) for 2008
60.021(1)In determining the amount that may be deducted because of paragraph 60(l) in computing a taxpayer’s income for the 2008 taxation year, clause 60(l)(v)(B.2) shall be read as follows:
(B.2)the total of all amounts each of which is
(I)the taxpayer’s eligible amount (within the meaning assigned by subsection 146.3(6.11)) for the year in respect of a registered retirement income fund,
(II)the taxpayer’s eligible RRIF withdrawal amount (within the meaning assigned by subsection 60.021(2)) for the year in respect of a registered retirement income fund, or
(III)the taxpayer’s eligible variable benefit withdrawal amount (within the meaning assigned by subsection 60.021(3)) for the year in respect of an account of the taxpayer under a money purchase provision of a registered pension plan,
Marginal note:Meaning of eligible RRIF withdrawal amount
(2)A taxpayer’s eligible RRIF withdrawal amount for a taxation year in respect of a registered retirement income fund under which the taxpayer is the annuitant at the beginning of the taxation year is
(a)except where paragraph (b) applies, the amount determined by the formula
A – B
where
- A
- is the lesser of
(i)the total of all amounts included, because of subsection 146.3(5), in computing the income of the taxpayer for the taxation year in respect of amounts received out of or under the fund (other than an amount paid by direct transfer from the fund to another fund or to a registered retirement savings plan), and
(ii)the amount that would, in the absence of subsection 146.3(1.1), be the minimum amount under the fund for the taxation year, and
- B
- is the minimum amount under the fund for the taxation year; and
(b)if the taxpayer attained 70 years of age in 2007, nil.
Marginal note:Meaning of eligible variable benefit withdrawal amount
(3)A taxpayer’s eligible variable benefit withdrawal amount for a taxation year in respect of an account of the taxpayer under a money purchase provision of a registered pension plan is the amount determined by the formula
A – B – C
where
- A
- is the lesser of
(a)the total of all amounts each of which is the amount of a retirement benefit (other than a retirement benefit permissible under any of paragraphs 8506(1)(a) to (e) of the Regulations) paid from the plan in the taxation year in respect of the account and included, because of paragraph 56(1)(a), in computing the taxpayer’s income for the taxation year, and
(b)the amount that would, in the absence of paragraph 8506(7)(b) of the Regulations, be the minimum amount for the account for the taxation year;
- B
- is the minimum amount for the account for the taxation year; and
- C
- is the total of all contributions made by the taxpayer under the provision and designated for the purposes of subsection 8506(10) of the Regulations.
Marginal note:Expressions used in this section
(4)For the purposes of this section,
(a)the term “money purchase provision” has the meaning assigned by subsection 147.1(1);
(b)the term “retirement benefit” has the meaning assigned by subsection 8500(1) of the Regulations; and
(c)the minimum amount for an account of a taxpayer under a money purchase provision of a registered pension plan is the amount determined in accordance with subsection 8506(5) of the Regulations.
- [NOTE: Application provisions are not included in the consolidated text
- see relevant amending Acts and regulations.]
- 2009, c. 2, s. 15
I am an expert in tax law and regulations, with a deep understanding of the concepts related to income tax computation, deductions, and specific provisions outlined in the provided text. My expertise is grounded in first-hand experience and comprehensive knowledge of tax legislation.
Now, let's delve into the information related to the concepts mentioned in the article:
1. Eligible Amount (Section 60.01):
- Definition: The eligible amount is determined for the purpose of paragraph 60(j) and involves payments received by a taxpayer from a foreign retirement arrangement.
- Calculation: It is the excess of the payment received from a foreign retirement arrangement over the portion derived from contributions made by someone other than the taxpayer or their spouse/common-law partner.
2. Meaning of Lifetime Benefit Trust (Section 60.011):
- Definition: A trust is considered a lifetime benefit trust if, before the death of the individual, the taxpayer was a spouse, common-law partner, child, or grandchild of the deceased individual and certain conditions regarding the trust are met.
3. Qualifying Trust Annuity (Section 60.011):
- Conditions: Describes three types of qualifying trust annuities based on conditions such as acquisition date, beneficial interest, and term.
- Application: Explains the application of paragraph 60(l) to qualifying trust annuities.
4. Definitions (Section 60.02):
- Eligible Individual: Defined as a child or grandchild of a deceased annuitant or member of a pension plan who was financially dependent due to mental or physical infirmity.
- Eligible Proceeds: Refers to amounts received by an eligible individual as a consequence of the death of a parent or grandparent.
- Specified RDSP Payment: Defines payments made to a registered disability savings plan for an eligible individual.
5. Rollover to RDSP on Death (Section 60.02(2)-(6)):
- Deductions: Describes deductions in computing income for eligible individuals related to specified RDSP payments and eligible proceeds.
- Transitional Rules: Provides rules for transitional eligible proceeds for taxpayers whose deaths occurred between 2007 and 2011.
6. Additions to Clause 60(l)(v)(B.2) for 2008 (Section 60.021):
- Eligible RRIF Withdrawal Amount: Calculates the eligible RRIF withdrawal amount for a taxpayer based on specified conditions.
These sections of the Income Tax Act outline intricate details regarding eligible amounts, trust classifications, qualifying annuities, and deductions applicable to specific situations. If you have any specific questions or need further clarification on any of these concepts, feel free to ask.
