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Offside RRSPs - Act Before June 30 for Transitional Relief 

Canadian Tax Adviser

 

May 29, 2012

 

Taxpayers have until June 30, 2012 to elect to take advantage of the transitional relief for certain RRSP investments (and related income) that unexpectedly became prohibited investments by filing Form RC341 "Election on Transitional Prohibited Investment Benefit for RRSPs and RRIFs". Any penalty taxes owing under the RRSP anti-avoidance rules must be submitted to the CRA using Form RC339 "Individual Return for Certain Taxes for RRSPs or RRIFs for Tax Year 2011" and filed with a payment for any balance due no later than June 30, 2012.

Background
The 2011 federal budget introduced new anti-avoidance rules for registered retirement savings plans (RRSP) similar to those already enacted for tax-free savings accounts (TFSA). This legislation, enacted on December 15, 2011, includes transitional relief for certain RRSP investments (and related income) that unexpectedly became prohibited investments because of the 2011 federal budget.

 

The rules in this area are complex. If you think you may be affected, please contact your KPMG adviser.

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