Income Tax Act
Marginal note:Definitions
146.4 (1) The following definitions apply in this section.
- assistance holdback amount
assistance holdback amount, in relation to a disability savings plan, has the meaning assigned under the Canada Disability Savings Act. (montant de retenue)
- contribution
contribution to a disability savings plan does not include (other than for the purpose of paragraph (b) of the definition disability savings plan)
(a) an amount paid into the plan under or because of the Canada Disability Savings Act or a designated provincial program;
(b) an amount paid into the plan under or because of any other program that has a similar purpose to a designated provincial program and that is funded, directly or indirectly, by a province (other than an amount paid into the plan by an entity described in subparagraph (a)(iii) of the definition qualifying person in its capacity as holder of the plan);
(c) an amount transferred to the plan in accordance with subsection (8); or
(d) other than for the purposes of paragraphs (4)(f) to (h) and (n),
(i) a specified RDSP payment as defined in subsection 60.02(1), or
(ii) an accumulated income payment made to the plan under subsection 146.1(1.2). (cotisation)
- designated provincial program
designated provincial program means a program that is established under the laws of a province and that supports savings in registered disability savings plans. (programme provincial désigné)
- disability assistance payment
disability assistance payment, in relation to a disability savings plan of a beneficiary, means any payment made from the plan to the beneficiary or to the beneficiary’s estate. (paiement d’aide à l’invalidité)
- disability savings plan
disability savings plan of a beneficiary means an arrangement
(a) between
(i) a corporation (in this definition referred to as the “issuer”)
(A) that is licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee, and
(B) with which the specified Minister has entered into an agreement that applies to the arrangement for the purposes of the Canada Disability Savings Act, and
(ii) one or more of the following:
(A) the beneficiary,
(B) an entity that, at the time the arrangement is entered into, is a qualifying person described in paragraph (a) or (b) of the definition qualifying person in relation to the beneficiary,
(B.1) if the arrangement is entered into before 2024, a qualifying family member in relation to the beneficiary who, at the time the arrangement is entered into, is a qualifying person in relation to the beneficiary,
(B.2) a qualifying family member in relation to the beneficiary who, at the time the arrangement is entered into, is not a qualifying person in relation to the beneficiary but is a holder of another arrangement that is a registered disability savings plan of the beneficiary, and
(C) a legal parent of the beneficiary who, at the time the arrangement is entered into, is not a qualifying person in relation to the beneficiary but is a holder of another arrangement that is a registered disability savings plan of the beneficiary;
(b) under which one or more contributions are to be made in trust to the issuer to be invested, used or otherwise applied by the issuer for the purpose of making payments from the arrangement to the beneficiary; and
(c) that is entered into in a taxation year in respect of which the beneficiary is a DTC-eligible individual. (régime d’épargne-invalidité)
- DTC-eligible individual
DTC-eligible individual, in respect of a taxation year, means an individual in respect of whom an amount is deductible, or would if this Act were read without reference to paragraph 118.3(1)(c) be deductible, under section 118.3 in computing a taxpayer’s tax payable under this Part for the taxation year. (particulier admissible au CIPH)
- holder
holder of a disability savings plan at any time means each of the following:
(a) an entity that has, at that time, rights as an entity with whom the issuer entered into the plan;
(b) an entity that has, at that time, rights as a successor or assignee of an entity described in paragraph (a) or in this paragraph; and
(c) the beneficiary if, at that time, the beneficiary is not an entity described in paragraph (a) or (b) and has rights under the plan to make decisions (either alone or with other holders of the plan) concerning the plan, except where the only such right is a right to direct that disability assistance payments be made as provided for in subparagraph (4)(n)(ii). (titulaire)
- issuer
issuer, of an arrangement, means the person described as the “issuer” in the definition disability savings plan. (émetteur)
- lifetime disability assistance payments
lifetime disability assistance payments under a disability savings plan of a beneficiary means disability assistance payments that are identified under the terms of the plan as lifetime disability assistance payments and that, after they begin to be paid, are payable at least annually until the earlier of the day on which the beneficiary dies and the day on which the plan is terminated. (paiements viagers pour invalidité)
- plan trust
plan trust, in relation to a disability savings plan, means the trust governed by the plan. (fiducie de régime)
- qualified investment
qualified investment, for a trust governed by a RDSP, means
(a) an investment that would be described by any of paragraphs (a) to (d), (f) and (g) of the definition qualified investment in section 204 if the reference in that definition to “a trust governed by a deferred profit sharing plan or revoked plan” were read as a reference to “a trust governed by a RDSP” and if that definition were read without reference to the words “with the exception of excluded property in relation to the trust”;
(b) a contract for an annuity issued by a licensed annuities provider where
(i) the trust is the only person who, disregarding any subsequent transfer of the contract by the trust, is or may become entitled to any annuity payments under the contract, and
(ii) the holder of the contract has a right to surrender the contract at any time for an amount that would, if reasonable sales and administration charges were ignored, approximate the value of funds that could otherwise be applied to fund future periodic payments under the contract;
(c) a contract for an annuity issued by a licensed annuities provider where
(i) annual or more frequent periodic payments are or may be made under the contract to the holder of the contract,
(ii) the trust is the only person who, disregarding any subsequent transfer of the contract by the trust, is or may become entitled to any annuity payments under the contract,
(iii) neither the time nor the amount of any payment under the contract may vary because of the length of any life, other than the life of the beneficiary under the plan,
(iv) the day on which the periodic payments began or are to begin is not later than the end of the later of
(A) the year in which the beneficiary under the plan attains the age of 60 years, and
(B) the year following the year in which the contract was acquired by the trust,
(v) the periodic payments are payable for the life of the beneficiary under the plan and either there is no guaranteed period under the contract or there is a guaranteed period that does not exceed 15 years,
(vi) the periodic payments
(A) are equal, or
(B) are not equal solely because of one or more adjustments that would, if the contract were an annuity under a retirement savings plan, be in accordance with subparagraphs 146(3)(b)(iii) to (v) or that arise because of a uniform reduction in the entitlement to the periodic payments as a consequence of a partial surrender of rights to the periodic payments, and
(vii) the contract requires that, in the event the plan must be terminated in accordance with paragraph (4)(p), any amounts that would otherwise be payable after the termination be commuted into a single payment; and
(d) a prescribed investment. (placement admissible)
- qualifying family member
qualifying family member, in relation to a beneficiary of a disability savings plan, at any time, means an individual who, at that time, is
(a) a legal parent of the beneficiary; or
(b) a spouse or common-law partner of the beneficiary who is not living separate and apart from the beneficiary by reason of a breakdown of their marriage or common-law partnership. (membre de la famille admissible)
- qualifying person
qualifying person, in relation to a beneficiary of a disability savings plan, at any time, means
(a) if the beneficiary has not, at or before that time, attained the age of majority, an entity that is, at that time,
(i) a legal parent of the beneficiary,
(ii) a guardian, tutor, curator or other individual who is legally authorized to act on behalf of the beneficiary, or
(iii) a public department, agency or institution that is legally authorized to act on behalf of the beneficiary;
(b) if the beneficiary has, at or before that time, attained the age of majority and is not, at that time, contractually competent to enter into a disability savings plan, an entity that is, at that time, an entity described in subparagraph (a)(ii) or (iii); and
(c) other than for the purposes of subparagraph (4)(b)(iv), an individual who is a qualifying family member in relation to the beneficiary if
(i) at or before that time, the beneficiary has attained the age of majority and is not a beneficiary under a disability savings plan,
(ii) at that time, no entity described in subparagraph (a)(ii) or (iii) is legally authorized to act on behalf of the beneficiary, and
(iii) in the issuer’s opinion after reasonable inquiry, the beneficiary’s contractual competence to enter into a disability savings plan at that time is in doubt. (responsable)
- registered disability savings plan
registered disability savings plan or RDSP means a disability savings plan that satisfies the conditions in subsection (2), but does not include a plan to which subsection (3) or (10) applies. (régime enregistré d’épargne-invalidité ou REEI)
- specified maximum amount
specified maximum amount, for a calendar year in respect of a disability savings plan, means the amount that is the greater of
(a) the amount determined by the formula set out in paragraph (4)(l) in respect of the plan for the calendar year, and
(b) the amount determined by the formula
A + B
where
- A
- is 10% of the fair market value of the property held by the plan trust at the beginning of the calendar year (other than annuity contracts held by the plan trust that, at the beginning of the calendar year, are not described in paragraph (b) of the definition qualified investment), and
- B
- is the total of all amounts each of which is
(i) a periodic payment under an annuity contract held by the plan trust at the beginning of the calendar year (other than an annuity contract described at the beginning of the calendar year in paragraph (b) of the definition qualified investment) that is paid to the plan trust in the calendar year, or
(ii) if the periodic payment under such an annuity contract is not made to the plan trust because the plan trust disposed of the right to that payment in the calendar year, a reasonable estimate of that payment on the assumption that the annuity contract had been held throughout the calendar year and no rights under the contract were disposed of in the calendar year. (plafond)
- specified Minister
specified Minister means the minister designated under section 4 of the Canada Disability Savings Act. (ministre responsable)
- specified year
specified year, for a disability savings plan of a beneficiary means the particular calendar year in which a medical doctor or a nurse practitioner licensed to practise under the laws of a province (or of the place where the beneficiary resides) certifies in writing that the beneficiary’s state of health is such that, in the professional opinion of the medical doctor or the nurse practitioner, the beneficiary is not likely to survive more than five years and
(a) if the plan is a specified disability savings plan, each subsequent calendar year, but does not include any calendar year prior to the calendar year in which the certification is provided to the issuer of the plan; or
(b) in any other case, each of the five calendar years following the particular calendar year, but does not include any calendar year prior to the calendar year in which the certification is provided to the issuer of the plan. (année déterminée)
Marginal note:Specified disability savings plan
(1.1) If, in respect of a beneficiary under a registered disability savings plan, a medical doctor or a nurse practitioner licensed to practise under the laws of a province (or of the place where the beneficiary resides) certifies in writing that the beneficiary’s state of health is such that, in the professional opinion of the medical doctor or the nurse practitioner, the beneficiary is not likely to survive more than five years, the holder of the plan elects in prescribed form and provides the election and the medical certification in respect of the beneficiary to the issuer of the plan, and the issuer notifies the specified Minister of the election in a manner and format acceptable to the specified Minister, then the plan becomes a specified disability savings plan at the time the notification is received by the specified Minister.
Marginal note:Ceasing to be a specified disability savings plan
(1.2) A plan ceases to be a specified disability savings plan at the earliest of the following times:
(a) the time that the specified Minister receives a notification, in a manner and format acceptable to the specified Minister, from the issuer of the plan that the holder elects that the plan is to cease to be a specified disability savings plan;
(b) the time that is immediately before the earliest time in a calendar year when the total disability assistance payments, other than non-taxable portions, made from the plan in the year and while it was a specified disability savings plan exceeds $10,000 (or such greater amount as is required to satisfy the condition in subparagraph (d)(i));
(c) the time that is immediately before the time that
(i) a contribution is made to the plan,
(ii) an amount described in any of paragraphs (a) and (b) and subparagraph (d)(ii) of the definition contribution in subsection (1) is paid into the plan,
(iii) the plan is terminated,
(iv) the plan ceases to be a registered disability savings plan as a result of the application of paragraph (10)(a), or
(v) is the beginning of the first calendar year throughout which the beneficiary under the plan has no severe and prolonged impairments with the effects described in paragraph 118.3(1)(a.1); and
(d) the time immediately following the end of a calendar year if
(i) in the year the total amount of disability assistance payments made from the plan to the beneficiary is less than the amount determined by the formula set out in paragraph (4)(l) in respect of the plan for the year (or such lesser amount as is supported by the property of the plan), and
(ii) the year is not the calendar year in which the plan became a specified disability savings plan.
(e) and (f) [Repealed, 2012, c. 31, s. 35]
Marginal note:Waiting period
(1.3) If at any time, a plan has ceased to be a specified disability savings plan because of subsection (1.2), then the holder of the plan may not make an election under subsection (1.1) until 24 months after that time.
Marginal note:Waiver
(1.4) The Minister may waive the application of subsections (1.2) or (1.3) if it is just and equitable to do so.
Marginal note:Beneficiary replacing holder
(1.5) Any holder of a disability savings plan who was a qualifying person in relation to the beneficiary under the plan at the time the plan (or another registered disability savings plan of the beneficiary) was entered into solely because of paragraph (c) of the definition qualifying person in subsection (1) ceases to be a holder of the plan and the beneficiary becomes the holder of the plan if
(a) the beneficiary is determined to be contractually competent by a competent tribunal or other authority under the laws of a province or, in the issuer’s opinion after reasonable inquiry, the beneficiary’s contractual competence to enter into a disability savings plan is no longer in doubt; and
(b) the beneficiary notifies the issuer that the beneficiary chooses to become the holder of the plan.
Marginal note:Entity replacing holder
(1.6) If an entity described in subparagraph (a)(ii) or (iii) of the definition qualifying person in subsection (1) is appointed in respect of a beneficiary of a disability savings plan and a holder of the plan was a qualifying person in relation to the beneficiary at the time the plan (or another registered disability savings plan of the beneficiary) was entered into solely because of paragraph (c) of that definition,
(a) the entity shall notify the issuer without delay of the entity’s appointment;
(b) the holder of the plan ceases to be a holder of the plan; and
(c) the entity becomes the holder of the plan.
Marginal note:Rules applicable in case of dispute
(1.7) If a dispute arises as a result of an issuer’s acceptance of a qualifying family member who was a qualifying person in relation to the beneficiary at the time the plan (or another registered disability savings plan of the beneficiary) was entered into solely because of paragraph (c) of the definition qualifying person in subsection (1) as a holder of a disability savings plan, from the time the dispute arises until the time that the dispute is resolved or an entity becomes the holder of the plan under subsection (1.5) or (1.6), the holder of the plan shall use their best efforts to avoid any reduction in the fair market value of the property held by the plan trust, having regard to the reasonable needs of the beneficiary under the plan.
Marginal note:Registered status
(2) The conditions that must be satisfied for a disability savings plan of a beneficiary to be a registered disability savings plan are as follows:
(a) before the plan is entered into, the issuer of the plan has received written notification from the Minister that, in the Minister’s opinion, a plan whose terms are identical to the plan would, if entered into by entities eligible to enter into a disability savings plan, comply with the conditions in subsection (4);
(b) at or before the time the plan is entered into, the issuer of the plan has been provided with the Social Insurance Number of the beneficiary and the Social Insurance Number or business number, as the case may be, of each entity with which the issuer has entered into the plan; and
(c) at the time the plan is entered into, the beneficiary is resident in Canada, except that this condition does not apply if, at that time, the beneficiary is the beneficiary under another registered disability savings plan.
Marginal note:Registered status nullified
(3) A disability savings plan is deemed never to have been a registered disability savings plan unless
(a) the issuer of the plan provides without delay notification of the plan’s establishment in prescribed form containing prescribed information to the specified Minister; and
(b) if the beneficiary is the beneficiary under another registered disability savings plan at the time the plan is established, that other plan is terminated without delay.
Marginal note:Plan conditions
(4) The conditions referred to in paragraph (2)(a) are as follows:
(a) the plan stipulates
(i) that it is to be operated exclusively for the benefit of the beneficiary under the plan,
(ii) that the designation of the beneficiary under the plan is irrevocable, and
(iii) that no right of the beneficiary to receive payments from the plan is capable, either in whole or in part, of surrender or assignment;
(b) the plan allows an entity to acquire rights as a successor or assignee of a holder of the plan only if the entity is
(i) the beneficiary,
(ii) the beneficiary’s estate,
(iii) a holder of the plan at the time the rights are acquired,
(iv) a qualifying person in relation to the beneficiary at the time the rights are acquired, or
(v) an individual who is a legal parent of the beneficiary and was previously a holder of the plan;
(c) the plan provides that, where an entity (other than a qualifying family member in relation to the beneficiary) that is a holder of the plan ceases to be a qualifying person in relation to the beneficiary at any time, the entity ceases at that time to be a holder of the plan;
(d) the plan provides for there to be at least one holder of the plan at all times that the plan is in existence and may provide for the beneficiary (or the beneficiary’s estate, as the case may be) to automatically acquire rights as a successor or assignee of a holder in order to ensure compliance with this requirement;
(e) the plan provides that, where an entity becomes a holder of the plan after the plan is entered into, the entity is prohibited (except to the extent otherwise permitted by the Minister or the specified Minister) from exercising their rights as a holder of the plan until the issuer has been advised of the entity having become a holder of the plan and been provided with the entity’s Social Insurance Number or business number, as the case may be;
(f) the plan prohibits contributions from being made to the plan at any time if
(i) the beneficiary is not a DTC-eligible individual in respect of the taxation year that includes that time, unless the contribution is a specified RDSP payment in respect of the beneficiary and, at that time, there is a valid election referred to in subsection (4.1) in respect of the beneficiary, or
(ii) the beneficiary died before that time;
(g) the plan prohibits a contribution from being made to the plan at any time if
(i) the beneficiary attained the age of 59 years before the calendar year that includes that time,
(ii) the beneficiary is not resident in Canada at that time, or
(iii) the total of the contribution and all other contributions made at or before that time to the plan or to any other registered disability savings plan of the beneficiary would exceed $200,000;
(h) the plan prohibits contributions to the plan by any entity that is not a holder of the plan, except with the written consent of a holder of the plan;
(i) the plan provides that no payments may be made from the plan other than
(i) disability assistance payments,
(ii) a transfer in accordance with subsection (8), and
(iii) repayments under the Canada Disability Savings Act or a designated provincial program;
(j) the plan prohibits a disability assistance payment from being made if it would result in the fair market value of the property held by the plan trust immediately after the payment being less than the assistance holdback amount in relation to the plan;
(k) the plan provides for lifetime disability assistance payments to begin to be paid no later than the end of the particular calendar year in which the beneficiary attains the age of 60 years or, if the plan is established in or after the particular year, in the calendar year following the calendar year in which the plan is established;
(l) the plan provides that the total amount of lifetime disability assistance payments made in any calendar year (other than a specified year for the plan) shall not exceed the amount determined by the formula
A/(B + 3 - C) + D
where
- A
- is the fair market value of the property held by the plan trust at the beginning of the calendar year (other than annuity contracts held by the plan trust that, at the beginning of the calendar year, are not described in paragraph (b) of the definition qualified investment in subsection (1)),
- B
- is the greater of 80 and the age in whole years of the beneficiary at the beginning of the calendar year,
- C
- is the age in whole years of the beneficiary at the beginning of the calendar year, and
- D
- is the total of all amounts each of which is
(i) a periodic payment under an annuity contract held by the plan trust at the beginning of the calendar year (other than an annuity contract described at the beginning of the calendar year in paragraph (b) of the definition qualified investment in subsection (1)) that is paid to the plan trust in the calendar year, or
(ii) if the periodic payment under such an annuity contract is not made to the plan trust because the plan trust disposed of the right to that payment in the calendar year, a reasonable estimate of that payment on the assumption that the annuity contract had been held throughout the calendar year and no rights under the contract were disposed of in the calendar year;
(m) the plan stipulates whether or not disability assistance payments that are not lifetime disability assistance payments are to be permitted under the plan;
(n) the plan provides that when the total of all amounts paid under the Canada Disability Savings Act before the beginning of a calendar year to any registered disability savings plan of the beneficiary exceeds the total of all contributions made before the beginning of the calendar year to any registered disability savings plan of the beneficiary,
(i) if the calendar year is not a specified year for the plan, the total amount of disability assistance payments made from the plan to the beneficiary in the calendar year shall not exceed the specified maximum amount for the calendar year, except that, in calculating that total amount, any payment made following a transfer in the calendar year from another plan in accordance with subsection (8) is to be disregarded if it is made
(A) to satisfy an undertaking described in paragraph (8)(d), or
(B) in lieu of a payment that would otherwise have been permitted to be made from the other plan in the calendar year had the transfer not occurred, and
(ii) if the beneficiary attained the age of 27 years, but not the age of 59 years, before the calendar year, the beneficiary has the right to direct that, within the constraints imposed by subparagraph (i) and paragraph (j), one or more disability assistance payments be made from the plan to the beneficiary in the calendar year;
(iii) [Repealed, 2012, c. 31, s. 35]
(n.1) the plan provides that, if the beneficiary attained the age of 59 years before a calendar year, the total amount of disability assistance payments made from the plan to the beneficiary in the calendar year shall not be less than the amount determined by the formula set out in paragraph (l) in respect of the plan for the calendar year (or such lesser amount as is supported by the property of the plan trust);
(o) the plan provides that, at the direction of the holders of the plan, the issuer shall transfer all of the property held by the plan trust (or an amount equal to its value) to another registered disability savings plan of the beneficiary, together with all information in its possession (other than information provided to the issuer of the other plan by the specified Minister) that may reasonably be considered necessary for compliance, in respect of the other plan, with the requirements of this Act and with any conditions and obligations imposed under the Canada Disability Savings Act; and
(p) the plan provides for any amounts remaining in the plan (after taking into consideration any repayments under the Canada Disability Savings Act or a designated provincial program) to be paid to the beneficiary or the beneficiary’s estate, as the case may be, and for the plan to be terminated, by the end of the calendar year following the earlier of
(i) the calendar year in which the beneficiary dies, and
(ii) the first calendar year
(A) if an election is made under subsection (4.1), that includes the time that the election ceases because of paragraph (4.2)(b) to be valid, and
(B) in any other case, throughout which the beneficiary has no severe and prolonged impairments with the effects described in paragraph 118.3(1)(a.1).
Marginal note:Election on cessation of DTC-eligibility
(4.1) A holder of a registered disability savings plan may elect in respect of a beneficiary under the plan who is not a DTC-eligible individual for a particular taxation year if
(a) a medical doctor or a nurse practitioner licensed to practise under the laws of a province certifies in writing that the nature of the beneficiary’s condition is such that, in the professional opinion of the medical doctor or the nurse practitioner, the beneficiary is likely to become a DTC-eligible individual for a future taxation year;
(b) the beneficiary was a DTC-eligible individual for the year that immediately precedes the particular taxation year;
(c) the holder makes the election in a manner and format acceptable to the specified Minister before the end of the year immediately following the particular taxation year and provides the election and the medical certification in respect of the beneficiary to the issuer of the plan; and
(d) the issuer notifies the specified Minister of the election in a manner and format acceptable to the specified Minister.
Marginal note:Election
(4.2) An election under subsection (4.1) ceases to be valid at the time that is the earlier of
(a) the beginning of the first taxation year for which the beneficiary is again a DTC-eligible individual; and
(b) the end of the fourth taxation year following the particular taxation year referred to in subsection (4.1).
Marginal note:Transitional rule
(4.3) Unless an election is made under subsection (4.1), if 2011 or 2012 is the first calendar year throughout which the beneficiary of a registered disability savings plan has no severe and prolonged impairments with the effects described in paragraph 118.3(1)(a.1) and the plan has not been terminated, then notwithstanding subparagraph (4)(p)(ii) as it read on March 28, 2012 and any terms of the plan required by that subparagraph, the plan must be terminated no later than December 31, 2014.
Marginal note:Trust not taxable
(5) No tax is payable under this Part by a trust on the taxable income of the trust for a taxation year if, throughout the period in the year during which the trust was in existence, the trust was governed by a registered disability savings plan, except that
(a) tax is payable under this Part by the trust on its taxable income for the year if the trust has borrowed money
(i) in the year, or
(ii) in a preceding taxation year and has not repaid it before the beginning of the year; and
(b) if the trust is not otherwise taxable under paragraph (a) on its taxable income for the year and, at any time in the year, it carries on one or more businesses or holds one or more properties that are not qualified investments for the trust, tax is payable under this Part by the trust on the amount that its taxable income for the year would be if it had no incomes or losses from sources other than those businesses and properties, and no capital gains or losses other than from dispositions of those properties, and for this purpose,
(i) “income” includes dividends described in section 83, and
(ii) paragraphs 38(a) and (b) are to be read as if the fraction set out in each of those paragraphs were replaced by the word “all”.
Marginal note:Taxation of disability assistance payments
(6) Where a disability assistance payment is made from a registered disability savings plan of a beneficiary, the amount, if any, by which the amount of the payment exceeds the non-taxable portion of the payment shall be included,
(a) if the beneficiary is alive at the time the payment is made, in computing the beneficiary’s income for the beneficiary’s taxation year in which the payment is made; and
(b) in any other case, in computing the income of the beneficiary’s estate for the estate’s taxation year in which the payment is made.
Marginal note:Non-taxable portion of disability assistance payment
(7) The non-taxable portion of a disability assistance payment made at a particular time from a registered disability savings plan of a beneficiary is the lesser of the amount of the disability assistance payment and the amount determined by the formula
A × B/C + D
where
- A
- is the amount of the disability assistance payment;
- B
- is the amount, if any, by which
(a) the total of all amounts each of which is the amount of a contribution made before the particular time to any registered disability savings plan of the beneficiary
exceeds
(b) the total of all amounts each of which is the amount that would be the non-taxable portion of a disability assistance payment made before the particular time from any registered disability savings plan of the beneficiary, if the formula in this subsection were read without reference to the description of D;
- C
- is the amount by which the fair market value of the property held by the plan trust immediately before the payment exceeds the assistance holdback amount in relation to the plan; and
- D
- is the amount in respect of which a holder of the plan pays a tax under section 207.05 in respect of the plan, or another plan for which the plan was substituted by the holder, that
(a) has not been waived, cancelled or refunded; and
(b) has not otherwise been used in the year or a preceding year in computing the non-taxable portion of a disability assistance payment made from the plan or another plan for which the plan was substituted.
Marginal note:Transfer of funds
(8) An amount is transferred from a registered disability savings plan (in this subsection referred to as the “prior plan”) of a beneficiary in accordance with this subsection if
(a) the amount is transferred directly to another registered disability savings plan (in this subsection referred to as the “new plan”) of the beneficiary;
(b) the prior plan is terminated immediately after the transfer;
(c) the issuer of the prior plan provides the issuer of the new plan with all information in its possession concerning the prior plan (other than information provided to the issuer of the new plan by the specified Minister) as may reasonably be considered necessary for compliance, in respect of the new plan, with the requirements of this Act and with any conditions and obligations imposed under the Canada Disability Savings Act; and
(d) where the beneficiary attained the age of 59 years before the calendar year in which the transfer occurs, the issuer of the new plan undertakes to make (in addition to any other disability assistance payments that would otherwise have been made from the new plan in the year) one or more disability assistance payments from the plan in the year, the total of which is equal to the amount, if any, by which
(i) the total amount of disability assistance payments that would have been required to be made from the prior plan in the year if the transfer had not occurred
exceeds
(ii) the total amount of disability assistance payments made from the prior plan in the year.
Marginal note:No income inclusion on transfer
(9) An amount transferred in accordance with subsection (8) is not, solely because of that transfer, to be included in computing the income of any taxpayer.
Marginal note:Non-compliance — cessation of registered status
(10) Where, at any particular time, a registered disability savings plan is non-compliant as described in subsection (11),
(a) the plan ceases, as of the particular time, to be a registered disability savings plan (other than for the purposes of applying, as of the particular time, this subsection and subsection (11));
(b) a disability assistance payment is deemed to have been made from the plan at the time (in this subsection referred to as the “relevant time”) immediately before the particular time to the beneficiary under the plan (or, if the beneficiary is deceased at the relevant time, to the beneficiary’s estate), the amount of which payment is equal to the amount, if any, by which
(i) the fair market value of the property held by the plan trust at the relevant time
exceeds
(ii) the assistance holdback amount in relation to the plan; and
(c) if the plan is non-compliant because of a payment that is not in accordance with paragraph (4)(j), a disability assistance payment is deemed to have been made from the plan at the relevant time (in addition to the payment deemed by paragraph (b) to have been made) to the beneficiary under the plan (or, if the beneficiary is deceased at the relevant time, to the beneficiary’s estate)
(i) the amount of which payment is equal to the amount by which the lesser of
(A) the assistance holdback amount in relation to the plan, and
(B) the fair market value of the property held by the plan trust at the relevant time
exceeds
(C) the fair market value of the property held by the plan trust immediately after the particular time, and
(ii) the non-taxable portion of which is deemed to be nil.
Marginal note:Non-compliance
(11) A registered disability savings plan is non-compliant
(a) at any time that the plan fails to comply with a condition in subsection (4);
(b) at any time that there is a failure to administer the plan in accordance with its terms (other than those terms which the plan is required by subparagraph (4)(a)(i) to stipulate); and
(c) at any time that a person fails to comply with a condition or an obligation imposed, with respect to the plan, under the Canada Disability Savings Act, and the specified Minister has notified the Minister that, in the specified Minister’s opinion, it is appropriate that the plan be considered to be non-compliant because of the failure.
Marginal note:Non-application of subsection (11)
(12) Where a registered disability savings plan would otherwise be non-compliant at a particular time because of a failure described in paragraph (11)(a) or (b),
(a) the Minister may waive the application of the relevant paragraph with respect to the failure, if it is just and equitable to do so;
(b) the Minister may deem the failure to have occurred at a later time;
(c) if the failure consists of the making of a contribution that is prohibited under any of paragraphs (4)(f) to (h), an amount equal to the amount of the contribution has been withdrawn from the plan within such period as is specified by the Minister and the Minister has approved the application of this paragraph with respect to the failure,
(i) the contribution is deemed never to have been made, and
(ii) the withdrawal is deemed not to be a disability assistance payment and not to be in contravention of the condition in paragraph (4)(i); or
(d) if the failure consists of the plan not being terminated by the time set out in paragraph (4)(p) and the failure was due to the issuer being unaware of, or there being some uncertainty as to, the existence of circumstances requiring that the plan be terminated,
(i) the Minister may specify a later time by which the plan is to be terminated (but no later than is reasonably necessary for the plan to be terminated in an orderly manner), and
(ii) paragraph (4)(p) and the plan terms are, for the purposes of paragraphs (11)(a) and (b), to be read as though they required the plan to be terminated by the time so specified.
Marginal note:Obligations of issuer
(13) The issuer of a registered disability savings plan shall,
(a) where an entity becomes a holder of the plan after the plan is entered into, so notify the specified Minister in prescribed form containing prescribed information on or before the day that is 60 days after the later of
(i) the day on which the issuer is advised of the entity having become a holder of the plan, and
(ii) the day on which the issuer is provided with the new holder’s Social Insurance Number or business number, as the case may be;
(b) not amend the plan before having received notification from the Minister that, in the Minister’s opinion, a plan whose terms are identical to the amended plan would, if entered into by entities eligible to enter into a disability savings plan, comply with the conditions in subsection (4);
(c) where the issuer becomes aware that the plan is, or is likely to become, non-compliant (determined without reference to paragraph (11)(c) and subsection (12)), notify the Minister and the specified Minister of this fact on or before the day that is 30 days after the day on which the issuer becomes so aware; and
(d) [Repealed, 2017, c. 33, s. 58]
(e) if the issuer enters into the plan with a qualifying family member who was a qualifying person in relation to the beneficiary at the time the plan (or another registered disability savings plan of the beneficiary) was entered into solely because of paragraph (c) of the definition qualifying person in subsection (1),
(i) so notify the beneficiary under the plan without delay in writing and include in the notification information setting out the circumstances in which the holder of the plan may be replaced under subsection (1.5) or (1.6), and
(ii) collect and use any information provided by the holder of the plan that is relevant to the administration and operation of the plan.
Marginal note:Issuer’s liability
(14) If, after reasonable inquiry, an issuer of a disability savings plan is of the opinion that an individual’s contractual competence to enter into a disability savings plan is in doubt, no action lies against the issuer for entering into a plan, under which the individual is the beneficiary, with a qualifying family member who was a qualifying person in relation to the beneficiary at the time the plan (or another registered disability savings plan of the beneficiary) was entered into solely because of paragraph (c) of the definition qualifying person in subsection (1).
- [NOTE: Application provisions are not included in the consolidated text
- see relevant amending Acts and regulations.]
- 2007, c. 35, s. 115
- 2008, c. 28, s. 25
- 2010, c. 12, s. 17, c. 25, s. 36
- 2011, c. 15, s. 2
- 2012, c. 19, s. 6, c. 31, s. 35
- 2013, c. 33, s. 16
- 2015, c. 36, s. 16
- 2017, c. 33, s. 58
- 2018, c. 12, s. 24
- Date modified: