Income Tax Act — I-3.3 146.4
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. 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. 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. 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. 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