Global

Details

  • Service: Tax, International Executive Services, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 11/29/2012

Canada - Fast-approaching deadline for one-time RRSP / RRIF election 

November 29: Certain taxpayers in Canada with registered retirement savings plan (RRSP) or registered retirement income fund (RRIF) investments may need to make a one-time tax election on or before 31 December 2012.

Under anti-avoidance rules introduced in Canada’s 2011 federal budget, when the combined percentage interest in a company's shares held by the annuitant's RRSP or RRIF, the annuitant, or any non-arm's length person is 10% or more, these shares may be considered a "prohibited investment" by the Canada Revenue Agency and thus subject to harsh penalties if no action is taken.


The rules provide some transitional relief for income and gains on prohibited investments held by an RRSP or RRIF on 23 March 2011 when:


  • Taxpayers file an election by 31 December 2012, and
  • Remove the income or gains from those prohibited investments by 31 March 2013 for 2012 income and 90 days after year-end for income earned in subsequent years

Read a November 2012 report prepared by the KPMG member firm in Canada:

RRSP Investments in CCPCs - Don't Miss Key December 31, 2012 Transitional Relief Deadline





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1801 K Street NW
Washington, DC 20006.

 

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