Tax wiki
s. 205

PART XI — Tax in Respect of Advanced Life Deferred Annuity

Definitions

Not yet annotated · Text current to 2026-06-21 · section last amended 2024-06-20

Current text

(1)

The following definitions apply in this section.

ALDA dollar limit, for a calendar year, means

(a)

for 2020, $150,000; and

(b)

for each year after 2020, the amount (rounded to the nearest multiple of $10,000, or if that amount is equidistant from two such consecutive multiples, to the higher multiple) that is equal to $150,000 adjusted for each year after 2020 in the manner set out in section 117.1. (plafond de la RVDAA)

cumulative excess amount, of an individual at any particular time in a calendar year, means the amount determined by the formula

A − B

where

is the greater of

(a)

the total of all amounts each of which is an excess ALDA transfer of the individual at or before the particular time, and

(b)

the amount determined by the formula

C − D

where

is the total of all amounts each of which is the amount of a transfer at or before the particular time to acquire an advanced life deferred annuity on behalf of the individual, and

is the ALDA dollar limit for the calendar year; and

is the total of all amounts each of which is the amount of a refund described in paragraph (g) of the definition advanced life deferred annuity in subsection 146.5(1) made at or before the particular time on behalf of the individual. (excédent cumulatif)

excess ALDA transfer, of an individual, means the portion of the amount of a transfer, made from a transferor plan under any of subsections 146(16) and 146.3(14.1) and paragraphs 147(19)(d), 147.3(1)(c) and 147.5(21)(c) to acquire an advanced life deferred annuity on behalf of the individual, determined by the formula

A − B

where

is the amount of the transfer; and

is the amount determined by the formula

0.25(C + D) − E

where

is the total value of the property held for the benefit of the individual under the transferor plan at the end of the calendar year preceding the calendar year in which the transfer is made, other than

(a)

if the transferor plan is a registered pension plan, property held in connection with

(i)

a defined benefit provision (as defined in subsection 147.1(1)) of the transferor plan, or

(ii)

a VPLA fund, as described in subsection 8506(13) of the Income Tax Regulations,

(b)

if the transferor plan is a pooled registered pension plan, property held in connection with benefits that would be described in paragraph 147.5(5)(a) if the reference in that paragraph to “8506(1)(e.1) or (e.2)” were read as a reference to “8506(1)(e.2)”,

(c)

if the transferor plan is a registered retirement income fund, contracts for annuities held in connection with the fund other than annuities described in paragraph (b.1) of the definition qualified investment in subsection 146.3(1), and

(d)

if the transferor plan is a registered retirement savings plan, contracts for annuities held in connection with the plan other than annuities described in paragraph (c.1) of the definition qualified investment in subsection 146(1),

is the total of all amounts each of which is the amount transferred from the transferor plan, in a calendar year preceding the calendar year in which the transfer is made, to acquire an advanced life deferred annuity on behalf of the individual, and

is the total of all amounts each of which is the amount of a previous transfer from the transferor plan to acquire an advanced life deferred annuity on behalf of the individual. (excédent de transfert au titre de la RVDAA)

Tax payable by individuals

(2)

If at the end of any month an individual has a cumulative excess amount, the individual shall, in respect of that month, pay a tax under this Part equal to 1% of that cumulative excess amount.

Waiver of tax

(3)

If an individual would, but for this subsection, be required to pay a tax under subsection (2) in respect of a month, the Minister may waive or cancel all or part of the tax if the individual establishes to the satisfaction of the Minister that

(a)

the cumulative excess amount on which the tax is based arose as a consequence of reasonable error; and

(b)

reasonable steps are being taken to eliminate the cumulative excess amount.

Source: Justice Laws Website. Not an official version.

Historic text

Immediately preceding version, in force from 2021-06-29 to 2024-06-19:

Show the text in force 2021-06-29 to 2024-06-19

Definitions

205 (1) The following definitions apply in this section.
ALDA dollar limit
ALDA dollar limit, for a calendar year, means
- (a) for 2020, $150,000; and
- (b) for each year after 2020, the amount (rounded to the nearest multiple of $10,000, or if that amount is equidistant from two such consecutive multiples, to the higher multiple) that is equal to $150,000 adjusted for each year after 2020 in the manner set out in section 117.1. (plafond de la RVDAA)
cumulative excess amount
cumulative excess amount, of an individual at any particular time in a calendar year, means the amount determined by the formula
A − B
where
Ais the greater of
- (a) the total of all amounts each of which is an excess ALDA transfer of the individual at or before the particular time, and
- (b) the amount determined by the formula
  C − D
  where
  Cis the total of all amounts each of which is the amount of a transfer at or before the particular time to acquire an advanced life deferred annuity on behalf of the individual, andDis the ALDA dollar limit for the calendar year; and
Bis the total of all amounts each of which is the amount of a refund described in paragraph (g) of the definition advanced life deferred annuity in subsection 146.5(1) made at or before the particular time on behalf of the individual. (excédent cumulatif)
excess ALDA transfer
excess ALDA transfer, of an individual, means the portion of the amount of a transfer, made from a transferor plan under any of subsections 146(16) and 146.3(14.1) and paragraphs 147(19)(d), 147.3(1)(c) and 147.5(21)(c) to acquire an advanced life deferred annuity on behalf of the individual, determined by the formula
A − B
where
Ais the amount of the transfer; andBis the amount determined by the formula
0.25(C + D) − E
where
Cis the total value of the property held for the benefit of the individual under the transferor plan at the end of the calendar year preceding the calendar year in which the transfer is made, other than
- (a) if the transferor plan is a registered pension plan, property held in connection with
  - (i) a defined benefit provision (as defined in subsection 147.1(1)) of the transferor plan, or
  - (ii) a VPLA fund, as described in subsection 8506(13) of the Income Tax Regulations,
- (b) if the transferor plan is a pooled registered pension plan, property held in connection with benefits that would be described in paragraph 147.5(5)(a) if the reference in that paragraph to “8506(1)(e.1) or (e.2)” were read as a reference to “8506(1)(e.2)”,
- (c) if the transferor plan is a registered retirement income fund, contracts for annuities held in connection with the fund other than annuities described in paragraph (b.1) of the definition qualified investment in subsection 146.3(1), and
- (d) if the transferor plan is a registered retirement savings plan, contracts for annuities held in connection with the plan other than annuities described in paragraph (c.1) of the definition qualified investment in subsection 146(1),
Dis the total of all amounts each of which is the amount transferred from the transferor plan, in a calendar year preceding the calendar year in which the transfer is made, to acquire an advanced life deferred annuity on behalf of the individual, andEis the total of all amounts each of which is the amount of a previous transfer from the transferor plan to acquire an advanced life deferred annuity on behalf of the individual. (excédent de transfert au titre de la RVDAA)
Tax payable by individuals
(2) If at the end of any month an individual has a cumulative excess amount, the individual shall, in respect of that month, pay a tax under this Part equal to 1% of that cumulative excess amount.
Waiver of tax
(3) If an individual would, but for this subsection, be required to pay a tax under subsection (2) in respect of a month, the Minister may waive or cancel all or part of the tax if the individual establishes to the satisfaction of the Minister that
- (a) the cumulative excess amount on which the tax is based arose as a consequence of reasonable error; and
- (b) reasonable steps are being taken to eliminate the cumulative excess amount.

[NOTE: Application provisions are not included in the consolidated text
see relevant amending Acts and regulations.]
R.S., 1985, c. 1 (5th Supp.), s. 205
2005, c. 30, s. 14
2007, c. 35, s. 120
2010, c. 12, s. 20
2017, c. 33, s. 66
2021, c. 23, s. 49

This version on Justice Laws

Earlier versions: Justice Laws point-in-time versions of the Act (from 31 August 2004), and CanLII (under “Versions”). On Justice Laws, each version of section 205 links to the one before it.

Enacting and amending legislation

R.S., 1985, c. 1 (5th Supp.), s. 205; 2005, c. 30, s. 14; 2007, c. 35, s. 120; 2010, c. 12, s. 20; 2017, c. 33, s. 66
2021, c. 23, s. 49
2024, c. 17, s. 64(F)

Text before 2004 is found in the annual Statutes of Canada cited above. Application and coming-into-force provisions are not part of the consolidation; see the amending Acts.

Cross-references

This section refers to

s. 117.1 s. 146 s. 146.3 s. 146.5 s. 147 s. 147.1 s. 147.5

Referred to in

s. 40

References are generated from the statutory text and list other sections of the Act only.

Citation

Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), s. 205.