Income Tax Act

Marginal note:Tax payable in respect of advantage

• 207.05 (1) A tax is payable under this Part for a calendar year if, in the year, an advantage in relation to a registered plan is extended to, or is received or receivable by, the controlling individual of the registered plan, a trust governed by the registered plan, or any other person who does not deal at arm’s length with the controlling individual.

• Marginal note:Amount of tax payable

  (2) The amount of tax payable in respect of an advantage described in subsection (1) is

  • (a) in the case of a benefit, the fair market value of the benefit;

  • (b) in the case of a loan or an indebtedness, the amount of the loan or indebtedness; and

  • (c) in the case of an RRSP strip, the amount of the RRSP strip.

• Marginal note:Liability for tax

  (3) The controlling individual of a registered plan in connection with which a tax is imposed under subsection (1) is liable to pay the tax except that, if the advantage is extended by the issuer or carrier of the registered plan or by a person with whom the issuer or carrier is not dealing at arm’s length, the issuer or carrier, and not the controlling individual, is liable to pay the tax.

• Marginal note:Transitional rule

  (4) If an individual so elects before March 2, 2013 in prescribed form, subsection (1) does not apply in respect of any advantage that is an amount included in the calculation of the transitional prohibited investment benefit of the individual for a taxation year provided that the transitional prohibited investment benefit

  • (a) is paid to the individual, from a RRIF or RRSP of the individual, on or before the later of April 2, 2013 and the day that is 90 days after the end of the taxation year; and

  • (b) is not paid by way of transfer to another RRIF or RRSP of the individual.