,canada ,cu/oms                       #a
& ,rev5ue ,ag5cy

          ,9t]pret,n ,bullet9
    
,subject3 ,9come ,tax ,act
  ,retir$ ,"pn]s
,numb]3 ,,it-#bdb;,r
,date3 ,septemb] #f1 #aiia
,ref];e3 ,sec;n #ih.a 7al sec;ns #dc1
  #dh1 #if1 #ih.b1 #aaj.f1 subsec;ns
  #dj7#c71 #ec7#a71 #ec7#b71 #gj7#f71
  #he7#c71 p>agraph #gj7#e77a71 &
  subp>agraph #aae7#a77b77;v72 subsec;ns
  #bc7#c7 & 7#d7 (! ,9come ,tax
  ,applic,n ,rules1 #aiga 7,,itar72 &
  sec;n #bfjj (! ,9come ,tax ,regul,ns7

               ,applic,n
    
  ,? bullet9 replaces & c.els ,9t]pret,n
,bullet9 ,,it-#bdb dat$ ,augu/ #ah1
#aige &! ,special ,rel1se 6,,it-#bdb
dat$ ,septemb] #d1 #aihd4 ,curr5t
revi.ns >e designat$ 0v]tical l9es4   #a
                ,summ>y              a#a
    
  ,? bullet9 d1ls )! rules t apply :5 a
"pn] retires or )draws f a "pn]%ip4 ,!
-;t>y 2l 4t+ui%es 2t an 9come 9t]e/ &a
residual 9t]e/ 9 a "pn]%ip & expla9s "s
(! rules peculi> 6ea* ( ^! 9t]e/s4

          ,4cus.n & ,9t]pret,n
    
      ,residual ,9t]e/s 7p>agraphs
                 #a-h7
    
#a4 ,:5 a "pn] c1ses 6be a memb] (a
  "pn]%ip 7a 8retir$ "pn]07 & all (!
  retir$ "pn]'s "rs 6"pn]%ip prop]ty = t
  "pn]%ip 9t]e/ >e n satisfi$1 ! retir$
  "pn] has a .residual .9t]e/ 9 t
  "pn]%ip 0virtue ( p>agraph
  #ih.a7#a77a74 ,9 s* circum/.es1 a
  "pn]'s "pn]%ip 9t]e/ is deem$ n 6be
  4pos$ ( on retire;t b r 2comes a
  residual 9t]e/ : has an adju/$ co/
  base equal 6! adju/$ co/ base (!
  "pn]'s "pn]%ip 9t]e/ immly 2f       #b
              ,,it-#bdb;,r           b#a
  retire;t4 ,s9ce a residual 9t]e/ is al
  deem$ 63t9ue 6be an 9t]e/ 9 a "pn]%ip1
  ! a4i;ns 6& deduc;ns f xs adju/$ co/
  base1 pursuant 6p>agraphs #ec7#a77e7 &
  #ec7#b77c71 apply4 ,a .residual .9t]e/
  is sep>ate & 4t9ct f an .9come .9t]e/
  9 a "pn]%ip4 ,9come 9t]e/s >e 4cuss$ 9
  #aj 6#ad 2l4
#b4 ,if all ! retir$ "pn]'s "rs 6"pn]%ip
  prop]ty >e satisfi$ af ! date (
  retire;t & 2f ! 5d (! "pn]%ip's fiscal
  p]iod 9 : ! "pn] retir$1 ! retir$ "pn]
  is deem$ n 6h 4pos$ (a residual 9t]e/
  9 !
--------------------------------------#b
  "pn]%ip until ! 5d ( t "picul> fiscal
  p]iod (! "pn]%ip4 ,? all[s ! retir$
  "pn]'s f9al alloc,n ( "pn]%ip 9come or
  loss = t "picul> fiscal p]iod 6be a4$
  to1 or deduct$ f1 ! adju/$ co/ base (!
  retir$ "pn]'s residual 9t]e/ "u
  subp>agraph #ec7#a77e77;i7 or
  #ec7#b77c77;i7 respectively4 ,al1 9 !
  p]iod f ! date ( full satisfac;n    #c
              ,,it-#bdb;,r           a#b
  (a residual 9t]e/ 6! 5d ( t "picul>
  fiscal p]iod1 a retir$ "pn] is deem$
  0subp>agraph #ih.a7#a77d77;i7 n 6be a
  "pn] except =! purpose ( all[+ !
  "pn]%ip 6allocate *>ita# gifts or
  political 3tribu;ns made 0! "pn]%ip4
  ,9 any o!r case1 a retir$ "pn] :o has
  a residual 9t]e/ is deem$ 0subp>agraph
  #ih.a7#a77d77;ii7 n 6be a "pn] except
  =! purpose ( w9d+ up a "pn]%ip
  pursuant 6subsec;n #he7#c74
#c4 ,subp>agraph #ec7#b77c77;v7 provides
  t any am.t rcvd 0! retir$ "pn] 9 full
  or "pial satisfac;n (a residual 9t]e/
  9 ! "pn]%ip reduces ! adju/$ co/ base
  (! 9t]e/4 ,if ! adju/$ co/ base is
  negative at ! 5d ( any fiscal p]iod (!
  "pn]%ip1 ! am.t 0: x is negative is
  deem$ 6be a capital ga9 0virtue (
  p>agraph #ih.a7#a77c71 &! adju/$ co/
  base is adju/$ 6z]o pursuant
  6subp>agraph #ec7#a77e77;vii74 ,a
  residual 9t]e/ is 4pos$ ( only :5 !
  retir$ "pn] rcvs f9al pay;t =!      #d
              ,,it-#bdb;,r           b#b
  9t]e/ f ! "pn]%ip4 ,x is at ? po9t t a
  capital loss1 if any1 may >ise4

,note3
  ,bill ;,c-#ah ta#d 9 ! ,h\se ( ,-mons
  on ,may #cj1 #aiia proposes an am5d;t
  6p>agraph #ih.a7#a77c7 = #aihe &
  subsequ5t tax,n ye>s4 ,? am5d;t1 if
  5act$ z propos$1 5sures t any ga9s
  result+ f ! applic,n ( ? p>agraph >e
  eligi# =! capital ga9s deduc;n "u
  sec;n #aaj.f4

#d4 ,if a retir$ "pn] 4poses (a residual
  9t]e/ 9 a "pn]%ip 0way ( sale or gift1
  ! normal rules = calculat+ a capital
  ga9 or loss apply4 7,see #i 2l47
#e4 ,:5 a retir$ "pn] c1ses 6be a
  resid5t ( ,canada1 subsec;n #dh7#a7
  applies 6deem t ! retir$ "pn]'s
  residual 9t]e/ is 4pos$ (= proce$s
  equal 6fair m>ket value1 .un.s !
  residual 9t]e/ is a taxa# ,canadian
  prop]ty4 ,a residual 9t]e/ is a     #e
              ,,it-#bdb;,r           c#b
  taxa# ,canadian prop]ty :5 x qualifies
  "u subp>agraph #aae7#a77b77;v71 or :5
  subsec;n
--------------------------------------#c
  #dh7#b7 deems x 6be taxa# ,canadian
  prop]ty 2c ! 3di;ns ( p>agraph
  #dh7#a77c7 reg>d+ ! furni%+ ( secur;y
  = pay;t ( tax >e met4
#f4 ,on d1?1 any residual 9t]e/ a retir$
  "pn] has 9 a "pn]%ip is deem$
  0p>agraph #gj7#e77a7 6be 4pos$ (=
  proce$s equal 6fair m>ket value4 ,? is
  s un.s ! residual 9t]e/ is transf]r$
  6! retir$ "pn]'s sp\se1 or 6a sp\sal
  tru/1 9 : case subsec;n #gj7#f7
  applies4
#g4 ,on ! d1? (a retir$ "pn]1 sec;n
  #ih.b provides t a taxpay] :o acquires
  ! retir$ "pn]'s residual 9t]e/ obta9s
  a 8"r 6rcv "pn]%ip prop]ty0 7: is n a
  residual 9t]e/7 at a co/ equal 6!
  proce$s deem$ 6h be5 rcvd 0! dec1s$4
  ,! "r 6rcv "pn]%ip prop]ty is n an
  9t]e/ 9 a "pn]%ip nor is !          #f
              ,,it-#bdb;,r           a#c
  recipi5t a memb] (! "pn]%ip4 ,p>agraph
  #ec7#b77o7 provides t any am.t rcvd 9
  full or "pial satisfac;n (! "r reduces
  xs adju/$ co/ base4 ,if at any "t !
  adju/$ co/ base 2comes negative1 !
  am.t 0: x is negative is deem$ 6be a
  capital ga9 0virtue ( subsec;n #dj7#c7
  &! adju/$ co/ base (! "r is adju/$
  6z]o 0virtue ( p>agraph #ec7#a77a74 ,9
  t case1 = purposes (! capital ga9s
  deduc;n "u sec;n #aaj.f1 ! "r is deem$
  0subsec;n #dj7#c7 6h be5 4pos$ ( 9 !
  ye>4 ,o!rwise1 z )a residual 9t]e/
  7see #d abv7 ! "r 6rcv "pn]%ip prop]ty
  is 4pos$ ( only :5 ! f9al pay;t 9
  respect "!( is rcvd4 ,sec;n #dc does n
  apply 9 ^! circum/.es4
#h4 ,s9ce a residual 9t]e/ is an 9t]e/ 9
  a "pn]%ip1 a retir$ "pn] may claim a
  deduc;n = #aiga a3.ts receiva#
  pursuant 6p>agraph #bc7#c77a7 (!
  ,,itar1 un.s prohibit$ f do+ s
  0subsec;n #bc7#d7 (! ,,itar4
                                      #g
      ,pur*ase & ,sale ( ,"pn]%ip    b#c
          ,9t]e/ 7p>agraph #i7
    
#i4 ,": ! rema9+ "pn]s agree 6pur*ase a
  retir+ "pn]'s "pn]%ip 9t]e/1 r ?an h !
  "pn]%ip allocate "pn]%ip prop]ty
  79clud+ m"oy7 9 satisfac;n (! 9t]e/1 !
  retir+ "pn] does n h a residual 9t]e/4
  ,s* an agree;t 3/itutes ! pur*ase &
  sale (a "pn]%ip 9t]e/ &! provi.ns (
  sec;n #ih.a d n apply4 ,:e!r "! is a
  pur*ase & sale (! "pn]%ip 9t]e/ or
  :e!r "! is a residual
--------------------------------------#d
  9t]e/ dep5ds on ! facts (! case1 &
  "picul>ly1 on ! agree;t am;g ! "pn]s
  &! retir+ "pn]4

       ,9come ,9t]e/s 7p>agraphs
                #aj-ac7
    
#aj4 ,a retir$ "pn] has an 9come 9t]e/
  pursuant 6subsec;n #if7#a.a7 if !
  pr9cipal activ;y (a "pn]%ip is ! c>ry+
  on (a busi;s 9 ,canada1 & all !     #h
              ,,it-#bdb;,r           a#d
  "pn]s agree 6allocate a %>e (! 9come
  or loss (! "pn]%ip 6! retir$ "pn]4
  ,see1 = example1 ! deci.n 9 ,valo v4
  ,m4,n4,r4 7#aihi7 #a ,,ctc #bcci1 #hi
  ,,dtc #bbc1 ": ! c\rt /at$ t all !
  "pn]s1 9clud+ ! retir$ "pn]1 m/ agree
  6! alloc,n4 ,any 9come or loss s
  allocat$ is 9clud$ 9 ! retir$ "pn]'s
  9come =! tax,n ye> 9 : ! "picul>
  fiscal p]iod (! "pn]%ip = : ! alloc,n
  0 made 5ds4 ,=! purpose ( ^! alloc,ns1
  ! retir$ "pn] is deem$ 6be a memb] (!
  "pn]%ip &! "pn]%ip rules 9 subsec;n
  #if7#a7 apply4
#aa4 ,! phrase1 86allocate a %>e (!
  9come or loss (! "pn]%ip0 9 p>agraph
  #if7#a.a77a71 9cludes a broad range (
  me?ods 0: 9come may 2 allocat$ 6a
  retir$ "pn]4 ,= example1 x 9cludes
  alloc,ns ": only 9come is allocat$ & n
  losses1 or ": ! agree;t calls =a 3/ant
  am.t 6be allocat$ ea* ye>4
#ab4 ,": a retir$ "pn] 4poses ( an 9come
  9t]e/ 9 a "pn]%ip1 ! proce$s (      #i
              ,,it-#bdb;,r           b#d
  4posi;n >e 9clud$ 9 9come pursuant
  6subsec;n #if7#a.b74 ,z a retir$ "pn]
  acquires ? 9t]e/ = no co/1 "! is no
  deduc;n f ! am.t s 9clud$ 9 9come
  pursuant 6subsec;n #if7#a.c74
#ac4 ,a profes.nal "pn]%ip may make an
  elec;n "u sec;n #cd 6exclude "w 9
  progress f 9come4 ,! elec;n is only
  availa# 6a "pn]%ip c>ry+ on ! busi;s (
  an a3.tant1 d5ti/1 lawy] 79clud+ a
  not>y1 9 ! prov9ce ( ,quebec71 m$ical
  doctor1 vet]9>ian1 or *iropractor4 ,s*
  a "pn]%ip may allocate 6a retir$ "pn]
  an am.t t repres5ts "w 9 progress t
  has n be5 9clud$ 9 ! 9come ( any "pn]
  2c ( t elec;n4 ,:e!r ? alloc,n
  repres5ts 9come or capital 6! retir$
  "pn] dep5ds on ! agree;t 2t ! retir$
  "pn] &! o!r memb]s (! "pn]%ip4 ,": !
  am.t allocat$ is deduct$ 9 -put+
  "pn]%ip 9come1 !n g5],y x is 9come 6!
  retir$ "pn]4 ,! curr5t v].n (

                                     #aj
              ,,it-#bdb;,r            #e
  ,,it-#deg1 ,elec;n 0,profes.nals
  6,exclude ,"w 9 ,progress f ,9come1
  4cusses ? elec;n 9 m detail4

     ,prov9cial ,alloc,ns 7p>agraph
                  #ad7
    
#ad4 ,": a %>e (! 9come (! "pn]%ip is
  allocat$ 6a retir$ "pn]1 ! am.t s
  allocat$ m/ 2 appor;n$ on ! retir$
  "pn]'s return am;g ea* (! prov9ces 9 :
  t "pn]%ip c>ri$ on busi;s "? a p]man5t
  e/abli%;t 9 t p]iod1 9 a3ord.e ) sec;n
  #bfjj (! ,9come ,tax ,regul,ns4









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