Registered Investments Flashcards
What contributes to RRSP contribution room?
net employment income, royalties, unemployment benefits (except ei), net research grants, net rental income, cpp disability, retiring allowances (prior to 1996 2k per year, prior to 1989 1.5k per year not vested member of pension plan, net business income, taxable support payments
Ineligible RRSP investments
lpp, real estate (except to certain mortgages) non arms length must be administered through national housing act approved lender rrsp owner owns the property and interest and principal received rent tax deductible, non arms length company shares that you own more than 10% of, futures or similar derivatives (where loss could be greater than account value)
RRSP Contribution End Date (old age)
December 31st of year you turn 71
Whether or not for non resident to file tax return for rrsp withdrawal
if tax rate would be over 25%, don’t file. if it’s under 25%, file to receive a refund
RRSP Upon Death
Spousal rollover, rollover to infirm child (can transfer up to 200k to rdsp and also transfer to rrsp, rollover to minor child (must annuitize within a year and payments must end at end of year child turns 18)
HBP details (all you know)
35k, must enter into agreement by 1st of following year and used within 30 days or closing. 1) if separated, can use if no longer a homeowner. 2) can purchase home for disabled person (must be related). (can’t have outstand balance in either case) can repay for year up to 60 days into next year. spousal rrsp doesn’t count as re-contribution. If you turn 71 or become non resident, outstanding balance added to income. If you die, can be added to income or spouse can assume repayments. Can cancel participation if home doesnt go through or doesnt qualify and repay funds by end of year after the funds were withdrawn
Lifelong learning plan
Up to 20k can be withdrawn + 20k from spouse (40k total) max 10k per year from one rrsp. can be no outstanding balance, need poe or acceptance. 10 year repayment. repayment begins earlier of fifth year after withdrawal or 1st year no longer enrolled in qualifying program. turning 71, dying, or non residency the same as hbp
Transer from non reg to rrsp
capital loss isnt deductible and capital gain is (be careful of superficial loss if you sell at a loss then transfer cash.)
DPSP Rules
If you own 10% or more of company, you and family cant have dpsp. Can contribute up to 18% of income or half of money purchase limit (pension limit, next years RRSP limit).dpsp =pa. must vest within 2 years.
DPSP withdrawal Timeframe and options
payable 90 days after the earliest of the death of plan member, termination of the plan, termination of employment, dec 31st of age 71. Can take cash withdrawal (like rrsp taxes), annuity (must be at least 10 years and cant be guaranteed for more than 15), transfer to dpsp, rrsp, rpp.
Qualifying service vs eligible, pensionable or credited
qualifying counts towards qualifying period but not member of pension plan. other service considers time as member of pension and determines pension benefit
Minimum survivor benefit
60-75% minimum. must have if pensioner is married or common law (can opt-out through waiver)
Maximum tax deferred transfer value vs commuted value
max amount that can go into lira, remainder can go to rrsp- if room is available. commuted value ios a pv calculation based on actuarial assumptions
PAR
refunded rrsp deduction room when client leaves pension and receives refund of overcontributions. usually equal to employee premiums paid - funding obligation in given year * 50%
Death of pensioner
results in commuted value being paid to spouse (in accumulation phase)
