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I-3 - Taxation Act
Section 905.0.6
Disposition versions
905.0.6. The conditions to which subparagraph a of the first paragraph of section 905.0.5 refers 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 a person to acquire rights as a successor or assignee of a holder of the plan only if the person is
i. the beneficiary under the plan,
ii. the beneficiary’s succession,
iii. a holder of the plan at the time the rights are acquired,
iv. a qualifying person in relation to the beneficiary under the plan at the time the rights are acquired, or
v. an individual who is the father or mother of the beneficiary under the plan and was previously a holder of the plan;
(c) the plan provides that, if a person, other than a qualifying family member in relation to the beneficiary under the plan, who is a holder of the plan ceases to be a qualifying person in relation to the beneficiary under the plan at any time, the person 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 under the plan or the beneficiary’s succession 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, if a person becomes a holder of the plan after the plan is entered into, the person is prohibited, except to the extent otherwise permitted by the Minister or the Minister responsible for the administration of the Canada Disability Savings Act (S.C. 2007, c. 35), from exercising the person’s rights as a holder of the plan until the issuer has been advised of the person having become a holder of the plan and been provided with the person’s Social Insurance Number or business number;
(f) the plan prohibits contributions from being made to the plan at any time if
i. the beneficiary is not an individual eligible for the tax credit for severe and prolonged impairment in mental or physical functions for the taxation year that includes that time, unless the contribution is a specified RDSP payment within the meaning of subsection 1 of section 60.02 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) 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 reached 59 years of age 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 person who 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 section 905.0.16, 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 calendar year in which the beneficiary under the plan reaches 60 years of age or, if the plan is entered into in or after the calendar year, in the calendar year following the calendar year in which the plan is entered into;
(l) the plan provides that the total amount of lifetime disability assistance payments made in a calendar year, other than a specified year for the plan, must not exceed the amount determined by the formula
[A/(B + 3 - C)] + D;
(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 and the conditions of subparagraphs 1 and 2 of subparagraph ii of subparagraph p are not met in the year, the total amount of disability assistance payments made to the beneficiary under the plan in the year must not exceed the specified maximum amount for the year, except that, in calculating that total amount, a payment made following a transfer in the year from another plan in accordance with section 905.0.16 is to be disregarded if it is made
(1) to satisfy an undertaking described in paragraph d of section 905.0.16, or
(2) in lieu of a payment that could otherwise have been made under the other plan in the year had the transfer not occurred, and
ii. (subparagraph repealed);
iii. if the beneficiary under the plan reached 27 years of age, but not 59 years of age, before the calendar year, the beneficiary has the right to direct that, within the constraints imposed by subparagraph i and by subparagraph j, one or more disability assistance payments be made under the plan to the beneficiary in the year;
(n.1) the plan provides that, if the beneficiary under the plan reached 59 years of age before a calendar year, the total amount of disability assistance payments made to the beneficiary in the calendar year must not be less than the amount determined by the formula in subparagraph l in respect of the plan for the 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 Minister responsible for the administration of the Canada Disability Savings Act) that may reasonably be considered necessary for compliance, in respect of the other plan, with the requirements of this Part and with any conditions and obligations under that 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 under the plan or the beneficiary’s succession, and for the plan to cease to exist, at or before the end of the calendar year following the earlier of
i. the calendar year in which the beneficiary under the plan dies, and
ii. the first calendar year in respect of which the following conditions are met:
(1) in the year, the holder of the plan has requested that the issuer terminate the plan, and
(2) throughout the year, the beneficiary has no severe and prolonged impairment in mental or physical functions the effects of which are described in paragraph a.1 of subsection 1 of section 118.3 of the Income Tax Act.
In the formula in subparagraph l of the first paragraph,
(a) 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 that, at the beginning of the calendar year, are not described in paragraph b of the definition of “qualified investment” in subsection 1 of section 146.4 of the Income Tax Act;
(b) B is the greater of 80 and the age in whole years of the beneficiary at the beginning of the calendar year;
(c) C is the age in whole years of the beneficiary at the beginning of the calendar year; and
(d) D is the aggregate 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 of “qualified investment” in subsection 1 of section 146.4 of the Income Tax Act, that is paid to the plan trust in the calendar year, or
ii. if the periodic payment under an annuity contract described in subparagraph i is not made to the plan trust because the plan trust disposed of the right to that payment in the calendar year, an amount that is a reasonable estimate of that payment on the assumption that the annuity contract had been held throughout the calendar year by the plan trust and no rights under the contract were disposed of in the calendar year.
Where, at a particular time after 18 March 2019 and before 1 January 2021, a registered disability savings plan would otherwise be required to be terminated because of subparagraph ii of subparagraph p of the first paragraph, as it read at that time, or any terms of the plan provided because of that subparagraph ii, then despite that subparagraph ii or those terms, the plan is not required to be terminated before 1 January 2021, if
(a) the beneficiary of the plan has no severe and prolonged impairment in mental or physical functions the effects of which are described in paragraph a.1 of subsection 1 of section 118.3 of the Income Tax Act; or
(b) a valid election was made under subsection 4.1 of section 146.4 of the Income Tax Act, as it read immediately before 1 January 2021, and the election ceases to be valid after 18 March 2019 and before 1 January 2021 because of paragraph b of subsection 4.2 of section 146.4 of that Act, as it read immediately before 1 January 2021.
Chapter V.2 of Title II of Book I applies in relation to an election made under subsection 4.1 of section 146.4 of the Income Tax Act to which subparagraph b of the third paragraph refers.
905.0.6. The conditions to which subparagraph a of the first paragraph of section 905.0.5 refers 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 a person to acquire rights as a successor or assignee of a holder of the plan only if the person is
i. the beneficiary under the plan,
ii. the beneficiary’s succession,
iii. a holder of the plan at the time the rights are acquired,
iv. a qualifying person in relation to the beneficiary under the plan at the time the rights are acquired, or
v. an individual who is the father or mother of the beneficiary under the plan and was previously a holder of the plan;
(c) the plan provides that, if a person, other than a qualifying family member in relation to the beneficiary under the plan, who is a holder of the plan ceases to be a qualifying person in relation to the beneficiary under the plan at any time, the person 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 under the plan or the beneficiary’s succession 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, if a person becomes a holder of the plan after the plan is entered into, the person is prohibited, except to the extent otherwise permitted by the Minister or the Minister responsible for the administration of the Canada Disability Savings Act (S.C. 2007, c. 35), from exercising the person’s rights as a holder of the plan until the issuer has been advised of the person having become a holder of the plan and been provided with the person’s Social Insurance Number or business number;
(f) the plan prohibits contributions from being made to the plan at any time if
i. the beneficiary is not an individual eligible for the tax credit for severe and prolonged impairment in mental or physical functions for the taxation year that includes that time, unless the contribution is a specified RDSP payment within the meaning of subsection 1 of section 60.02 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) in respect of the beneficiary and, at that time, a valid election is made under subsection 4.1 of section 146.4 of that Act 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 reached 59 years of age 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 person who 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 section 905.0.16, 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 calendar year in which the beneficiary under the plan reaches 60 years of age or, if the plan is entered into in or after the calendar year, in the calendar year following the calendar year in which the plan is entered into;
(l) the plan provides that the total amount of lifetime disability assistance payments made in a calendar year, other than a specified year for the plan, must not exceed the amount determined by the formula
[A/(B + 3 - C)] + D;
(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 to the beneficiary under the plan in the year must not exceed the specified maximum amount for the year, except that, in calculating that total amount, a payment made following a transfer in the year from another plan in accordance with section 905.0.16 is to be disregarded if it is made
(1) to satisfy an undertaking described in paragraph d of section 905.0.16, or
(2) in lieu of a payment that could otherwise have been made under the other plan in the year had the transfer not occurred, and
ii. (subparagraph repealed);
iii. if the beneficiary under the plan reached 27 years of age, but not 59 years of age, before the calendar year, the beneficiary has the right to direct that, within the constraints imposed by subparagraph i and by subparagraph j, one or more disability assistance payments be made under the plan to the beneficiary in the year;
(n.1) the plan provides that, if the beneficiary under the plan reached 59 years of age before a calendar year, the total amount of disability assistance payments made to the beneficiary in the calendar year must not be less than the amount determined by the formula in subparagraph l in respect of the plan for the 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 Minister responsible for the administration of the Canada Disability Savings Act) that may reasonably be considered necessary for compliance, in respect of the other plan, with the requirements of this Part and with any conditions and obligations under that 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 under the plan or the beneficiary’s succession, and for the plan to cease to exist, at or before the end of the calendar year following the earlier of
i. the calendar year in which the beneficiary under the plan dies, and
ii. the first calendar year
(1) if a valid election is made under subsection 4.1 of section 146.4 of the Income Tax Act (R.S.C. 1985, c. 1, (5th Suppl.)), that includes the time that the election ceases because of paragraph b of subsection 4.2 of section 146.4 of that Act to be valid, or
(2) throughout which the beneficiary has no severe and prolonged impairment in mental or physical functions the effects of which are described in paragraph a.1 of subsection 1 of section 118.3 of the Income Tax Act.
In the formula in subparagraph l of the first paragraph,
(a) 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 that, at the beginning of the calendar year, are not described in paragraph b of the definition of “qualified investment” in subsection 1 of section 146.4 of the Income Tax Act;
(b) B is the greater of 80 and the age in whole years of the beneficiary at the beginning of the calendar year;
(c) C is the age in whole years of the beneficiary at the beginning of the calendar year; and
(d) D is the aggregate 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 of “qualified investment” in subsection 1 of section 146.4 of the Income Tax Act, that is paid to the plan trust in the calendar year, or
ii. if the periodic payment under an annuity contract described in subparagraph i is not made to the plan trust because the plan trust disposed of the right to that payment in the calendar year, an amount that is a reasonable estimate of that payment on the assumption that the annuity contract had been held throughout the calendar year by the plan trust and no rights under the contract were disposed of in the calendar year.
Chapter V.2 of Title II of Book I applies in relation to an election made under subsection 4.1 of section 146.4 of the Income Tax Act.
Where the calendar year 2011 or 2012 is the first calendar year throughout which the beneficiary of a registered disability savings plan has no severe and prolonged impairment in mental or physical functions the effects of which are described in paragraph a.1 of subsection 1 of section 118.3 of the Income Tax Act and the plan has not been terminated, the plan must, despite subparagraph p of the first paragraph, as it read on 28 March 2012 and any terms of the plan required by that subparagraph, be terminated on or before 31 December 2014, unless a valid election is made under subsection 4.1 of section 146.4 of the Income Tax Act.
905.0.6. The conditions to which subparagraph a of the first paragraph of section 905.0.5 refers 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 a person to acquire rights as a successor or assignee of a holder of the plan only if the person is
i. the beneficiary under the plan,
ii. the beneficiary’s succession,
iii. a holder of the plan at the time the rights are acquired,
iv. a qualifying person in relation to the beneficiary under the plan at the time the rights are acquired, or
v. an individual who is the father or mother of the beneficiary under the plan and was previously a holder of the plan;
(c) the plan provides that, if a person, other than a qualifying family member in relation to the beneficiary under the plan, who is a holder of the plan ceases to be a qualifying person in relation to the beneficiary under the plan at any time, the person 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 under the plan or the beneficiary’s succession 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, if a person becomes a holder of the plan after the plan is entered into, the person is prohibited, except to the extent otherwise permitted by the Minister or the Minister responsible for the administration of the Canada Disability Savings Act (S.C. 2007, c. 35), from exercising the person’s rights as a holder of the plan until the issuer has been advised of the person having become a holder of the plan and been provided with the person’s Social Insurance Number or business number;
(f) the plan prohibits contributions from being made to the plan at any time if
i. the beneficiary is not an individual eligible for the tax credit for severe and prolonged impairment in mental or physical functions for the taxation year that includes that time, 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 reached 59 years of age 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 person who 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 section 905.0.16, 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 calendar year in which the beneficiary under the plan reaches 60 years of age or, if the plan is entered into in or after the calendar year, in the calendar year following the calendar year in which the plan is entered into;
(l) the plan provides that the total amount of lifetime disability assistance payments made in a calendar year, other than a specified year for the plan, must not exceed the amount determined by the formula
[A/(B + 3 - C)] + D;
(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 to the beneficiary under the plan in the year must not exceed the specified maximum amount for the year, except that, in calculating that total amount, a payment made following a transfer in the year from another plan in accordance with section 905.0.16 is to be disregarded if it is made
(1) to satisfy an undertaking described in paragraph d of section 905.0.16, or
(2) in lieu of a payment that could otherwise have been made under the other plan in the year had the transfer not occurred, and
ii. (subparagraph repealed);
iii. if the beneficiary under the plan reached 27 years of age, but not 59 years of age, before the calendar year, the beneficiary has the right to direct that, within the constraints imposed by subparagraph i and by subparagraph j, one or more disability assistance payments be made under the plan to the beneficiary in the year;
(n.1) the plan provides that, if the beneficiary under the plan reached 59 years of age before a calendar year, the total amount of disability assistance payments made to the beneficiary in the calendar year must not be less than the amount determined by the formula in subparagraph l in respect of the plan for the 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 Minister responsible for the administration of the Canada Disability Savings Act) that may reasonably be considered necessary for compliance, in respect of the other plan, with the requirements of this Part and with any conditions and obligations under that 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 under the plan or the beneficiary’s succession, and for the plan to cease to exist, at or before the end of the calendar year following the earlier of
i. the calendar year in which the beneficiary under the plan dies, and
ii. the first calendar year
(1) if a valid election is made under subsection 4.1 of section 146.4 of the Income Tax Act (R.S.C. 1985, c. 1, (5th Suppl.)), that includes the time that the election ceases because of paragraph b of subsection 4.2 of section 146.4 of that Act to be valid, or
(2) throughout which the beneficiary has no severe and prolonged impairment in mental or physical functions the effects of which are described in paragraph a.1 of subsection 1 of section 118.3 of the Income Tax Act.
In the formula in subparagraph l of the first paragraph,
(a) 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 that, at the beginning of the calendar year, are not described in paragraph b of the definition of “qualified investment” in subsection 1 of section 205 of the Income Tax Act;
(b) B is the greater of 80 and the age in whole years of the beneficiary at the beginning of the calendar year;
(c) C is the age in whole years of the beneficiary at the beginning of the calendar year; and
(d) D is the aggregate 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 of “qualified investment” in subsection 1 of section 205 of the Income Tax Act, that is paid to the plan trust in the calendar year, or
ii. if the periodic payment under an annuity contract described in subparagraph i is not made to the plan trust because the plan trust disposed of the right to that payment in the calendar year, an amount that is a reasonable estimate of that payment on the assumption that the annuity contract had been held throughout the calendar year by the plan trust and no rights under the contract were disposed of in the calendar year.
Chapter V.2 of Title II of Book I applies in relation to an election made under subsection 4.1 of section 146.4 of the Income Tax Act.
Where the calendar year 2011 or 2012 is the first calendar year throughout which the beneficiary of a registered disability savings plan has no severe and prolonged impairment in mental or physical functions the effects of which are described in paragraph a.1 of subsection 1 of section 118.3 of the Income Tax Act and the plan has not been terminated, the plan must, despite subparagraph p of the first paragraph, as it read on 28 March 2012 and any terms of the plan required by that subparagraph, be terminated on or before 31 December 2014, unless a valid election is made under subsection 4.1 of section 146.4 of the Income Tax Act.
905.0.6. The conditions to which subparagraph a of the first paragraph of section 905.0.5 refers 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 a person to acquire rights as a successor or assignee of a holder of the plan only if the person is
i. the beneficiary under the plan,
ii. the beneficiary’s succession,
iii. a holder of the plan at the time the rights are acquired,
iv. a qualifying person in relation to the beneficiary under the plan at the time the rights are acquired, or
v. an individual who is the father or mother of the beneficiary under the plan and was previously a holder of the plan;
(c) the plan provides that, if a person, other than the father or mother of the beneficiary under the plan, who is a holder of the plan ceases to be a qualifying person in relation to the beneficiary under the plan at any time, the person 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 under the plan or the beneficiary’s succession 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, if a person becomes a holder of the plan after the plan is entered into, the person is prohibited, except to the extent otherwise permitted by the Minister or the Minister responsible for the administration of the Canada Disability Savings Act (S.C. 2007, c. 35), from exercising the person’s rights as a holder of the plan until the issuer has been advised of the person having become a holder of the plan and been provided with the person’s Social Insurance Number or business number;
(f) the plan prohibits contributions from being made to the plan at any time if
i. the beneficiary is not an individual eligible for the tax credit for severe and prolonged impairment in mental or physical functions for the taxation year that includes that time, 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 reached 59 years of age 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 person who 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 section 905.0.16, 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 calendar year in which the beneficiary under the plan reaches 60 years of age or, if the plan is entered into in or after the calendar year, in the calendar year following the calendar year in which the plan is entered into;
(l) the plan provides that the total amount of lifetime disability assistance payments made in a calendar year, other than a specified year for the plan, must not exceed the amount determined by the formula
[A/(B + 3 - C)] + D;
(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 to the beneficiary under the plan in the year must not exceed the amount determined by the formula in subparagraph l in respect of the plan for the year, except that, in calculating that total amount, a payment made following a transfer in the year from another plan in accordance with section 905.0.16 is to be disregarded if it is made
(1) to satisfy an undertaking described in paragraph d of section 905.0.16, or
(2) in lieu of a payment that could otherwise have been made under the other plan in the year had the transfer not occurred,
ii. if the beneficiary under the plan reached 59 years of age before the calendar year, the total amount of disability assistance payments made to the beneficiary in the calendar year must not be less than the amount determined by the formula in subparagraph l in respect of the plan for the year or such lesser amount as is supported by the property of the plan trust, and
iii. if the beneficiary under the plan reached 27 years of age, but not 59 years of age, before the calendar year, the beneficiary has the right to direct that, within the constraints imposed by subparagraph i and by subparagraph j, one or more disability assistance payments be made under the plan to the beneficiary in the year;
(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 that may reasonably be considered necessary for compliance, in respect of the other plan, with the requirements of this Part 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 under the plan or the beneficiary’s succession, and for the plan to cease to exist, at or before the end of the calendar year following the calendar year in which the beneficiary under the plan dies or the first calendar year throughout which the beneficiary has no severe and prolonged impairment in mental or physical functions the effects of which are described in paragraph a.1 of subsection 1 of section 118.3 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)).
In the formula in subparagraph l of the first paragraph,
(a) 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 that, at the beginning of the calendar year, are not described in paragraph b of the definition of “qualified investment” in subsection 1 of section 205 of the Income Tax Act;
(b) B is the greater of 80 and the age in whole years of the beneficiary at the beginning of the calendar year;
(c) C is the age in whole years of the beneficiary at the beginning of the calendar year; and
(d) D is the aggregate 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 of “qualified investment” in subsection 1 of section 205 of the Income Tax Act, that is paid to the plan trust in the calendar year, or
ii. if the periodic payment under an annuity contract described in subparagraph i is not made to the plan trust because the plan trust disposed of the right to that payment in the calendar year, an amount that is a reasonable estimate of that payment on the assumption that the annuity contract had been held throughout the calendar year by the plan trust and no rights under the contract were disposed of in the calendar year.
905.0.6. The conditions to which subparagraph a of the first paragraph of section 905.0.5 refers 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 a person to acquire rights as a successor or assignee of a holder of the plan only if the person is
i. the beneficiary under the plan,
ii. the beneficiary’s succession,
iii. a holder of the plan at the time the rights are acquired,
iv. a qualifying person in relation to the beneficiary under the plan at the time the rights are acquired, or
v. an individual who is the father or mother of the beneficiary under the plan and was previously a holder of the plan;
(c) the plan provides that, if a person, other than the father or mother of the beneficiary under the plan, who is a holder of the plan ceases to be a qualifying person in relation to the beneficiary under the plan at any time, the person 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 under the plan or the beneficiary’s succession 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, if a person becomes a holder of the plan after the plan is entered into, the person is prohibited, except to the extent otherwise permitted by the Minister or the Minister responsible for the administration of the Canada Disability Savings Act (S.C. 2007, c. 35), from exercising the person’s rights as a holder of the plan until the issuer has been advised of the person having become a holder of the plan and been provided with the person’s Social Insurance Number or business number;
(f) the plan prohibits contributions from being made to the plan at any time if
i. the beneficiary is not an individual eligible for the tax credit for severe and prolonged impairment in mental or physical functions for the taxation year that includes that time, 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 reached 59 years of age 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 person who 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 section 905.0.16, 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 calendar year in which the beneficiary under the plan reaches 60 years of age or, if the plan is entered into in or after the calendar year, in the calendar year following the calendar year in which the plan is entered into;
(l) the plan provides that the total amount of lifetime disability assistance payments made in a calendar year, other than a specified year for the plan, must not exceed the amount determined by the formula
[A/(B + 3 - C)] + D;
(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 to the beneficiary under the plan in the year must not exceed the amount determined by the formula in subparagraph l in respect of the plan for the year, except that, in calculating that total amount, a payment made following a transfer in the year from another plan in accordance with section 905.0.16 is to be disregarded if it is made
(1) to satisfy an undertaking described in paragraph d of section 905.0.16, or
(2) in lieu of a payment that could otherwise have been made under the other plan in the year had the transfer not occurred,
ii. if the beneficiary under the plan reached 59 years of age before the calendar year, the total amount of disability assistance payments made to the beneficiary in the calendar year must not be less than the amount determined by the formula in subparagraph l in respect of the plan for the year or such lesser amount as is supported by the property of the plan trust, and
iii. if the beneficiary under the plan reached 27 years of age, but not 59 years of age, before the calendar year, the beneficiary has the right to direct that, within the constraints imposed by subparagraph i and by subparagraph j, one or more disability assistance payments be made under the plan to the beneficiary in the year;
(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 that may reasonably be considered necessary for compliance, in respect of the other plan, with the requirements of this Part 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 under the plan or the beneficiary’s succession, and for the plan to cease to exist, at or before the end of the calendar year following the calendar year in which the beneficiary under the plan dies or, if it is earlier, the first calendar year throughout which the beneficiary has no severe and prolonged impairment in mental or physical functions the effects of which are described in subparagraph a of the first paragraph of section 752.0.14.
In the formula in subparagraph l of the first paragraph,
(a) 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 that, at the beginning of the calendar year, are not described in paragraph b of the definition of “qualified investment” in subsection 1 of section 205 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.));
(b) B is the greater of 80 and the age in whole years of the beneficiary at the beginning of the calendar year;
(c) C is the age in whole years of the beneficiary at the beginning of the calendar year; and
(d) D is the aggregate 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 of “qualified investment” in subsection 1 of section 205 of the Income Tax Act, that is paid to the plan trust in the calendar year, or
ii. if the periodic payment under an annuity contract described in subparagraph i is not made to the plan trust because the plan trust disposed of the right to that payment in the calendar year, an amount that is a reasonable estimate of that payment on the assumption that the annuity contract had been held throughout the calendar year by the plan trust and no rights under the contract were disposed of in the calendar year.
905.0.6. The conditions to which subparagraph a of the first paragraph of section 905.0.5 refers 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 a person to acquire rights as a successor or assignee of a holder of the plan only if the person is
i. the beneficiary under the plan,
ii. the beneficiary’s succession,
iii. a holder of the plan at the time the rights are acquired,
iv. a qualifying person in relation to the beneficiary under the plan at the time the rights are acquired, or
v. an individual who is the father or mother of the beneficiary under the plan and was previously a holder of the plan;
(c) the plan provides that, if a person, other than the father or mother of the beneficiary under the plan, who is a holder of the plan ceases to be a qualifying person in relation to the beneficiary under the plan at any time, the person 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 under the plan or the beneficiary’s succession 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, if a person becomes a holder of the plan after the plan is entered into, the person is prohibited, except to the extent otherwise permitted by the Minister or the Minister responsible for the administration of the Canada Disability Savings Act (S.C. 2007, c. 35), from exercising the person’s rights as a holder of the plan until the issuer has been advised of the person having become a holder of the plan and been provided with the person’s Social Insurance Number or business number;
(f) the plan prohibits contributions from being made to the plan at any time if
i. the beneficiary is not an individual eligible for the tax credit for severe and prolonged impairment in mental or physical functions for the taxation year that includes that time, or
ii. the beneficiary died before that time;
(g) the plan prohibits a contribution from being made to the plan, other than as a transfer in accordance with section 905.0.16, at any time if
i. the beneficiary reached 59 years of age 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, other than as a transfer in accordance with section 905.0.16, 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 person who 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 section 905.0.16, and
iii. repayments under the Canada Disability Savings Act;
(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 calendar year in which the beneficiary under the plan reaches 60 years of age or, if the plan is entered into in or after the calendar year, in the calendar year following the calendar year in which the plan is entered into;
(l) the plan provides that the total amount of lifetime disability assistance payments made in a calendar year, other than a specified year for the plan, must not exceed the amount determined by the formula
[A/(B + 3 - C)] + D;
(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, other than as a transfer in accordance with section 905.0.16, 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 to the beneficiary under the plan in the year must not exceed the amount determined by the formula in subparagraph l in respect of the plan for the year, except that, in calculating that total amount, a payment made following a transfer in the year from another plan in accordance with section 905.0.16 is to be disregarded if it is made
(1) to satisfy an undertaking described in paragraph d of section 905.0.16, or
(2) in lieu of a payment that could otherwise have been made under the other plan in the year had the transfer not occurred,
ii. if the beneficiary under the plan reached 59 years of age before the calendar year, the total amount of disability assistance payments made to the beneficiary in the calendar year must not be less than the amount determined by the formula in subparagraph l in respect of the plan for the year or such lesser amount as is supported by the property of the plan trust, and
iii. if the beneficiary under the plan reached 27 years of age, but not 59 years of age, before the calendar year, the beneficiary has the right to direct that, within the constraints imposed by subparagraph i and by subparagraph j, one or more disability assistance payments be made under the plan to the beneficiary in the year;
(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 that may reasonably be considered necessary for compliance, in respect of the other plan, with the requirements of this Part 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, to be paid to the beneficiary under the plan or the beneficiary’s succession, and for the plan to cease to exist, at or before the end of the calendar year following the calendar year in which the beneficiary under the plan dies or, if it is earlier, the first calendar year throughout which the beneficiary has no severe and prolonged impairment in mental or physical functions the effects of which are described in subparagraph a of the first paragraph of section 752.0.14.
In the formula in subparagraph l of the first paragraph,
(a) 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 that, at the beginning of the calendar year, are not described in paragraph b of the definition of “qualified investment” in subsection 1 of section 205 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.));
(b) B is the greater of 80 and the age in whole years of the beneficiary at the beginning of the calendar year;
(c) C is the age in whole years of the beneficiary at the beginning of the calendar year; and
(d) D is the aggregate 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 of “qualified investment” in subsection 1 of section 205 of the Income Tax Act, that is paid to the plan trust in the calendar year, or
ii. if the periodic payment under an annuity contract described in subparagraph i is not made to the plan trust because the plan trust disposed of the right to that payment in the calendar year, an amount that is a reasonable estimate of that payment on the assumption that the annuity contract had been held throughout the calendar year by the plan trust and no rights under the contract were disposed of in the calendar year.
