• The foreign plan must constitute a superannuation or pension plan for purposes of the Act. The determination of whether a plan is a superannuation or pension plan is a question of fact. Generally, a plan will be considered to be a superannuation or pension plan where contributions have been made to the plan by or on behalf of an employer or former employer of an employee in consideration for services rendered by the employee and the contributions are used to provide an annuity or other periodic payment on or after the employee's retirement.

• The pension benefit must not be part of a series of periodic payments. Only lump-sum payments are eligible for the deduction. A lump-sum payment that represents a settlement of future entitlements under the pension plan, such as a full or partial commutation of pension benefits, would be eligible for the deduction. However, where a lump-sum payment does not represent a settlement of future entitlements under the pension plan, such as a payment of periodic pension payments in arrears or a payment of a retroactive adjustment on the periodic pension payments, that lump-sum payment will be considered part of the series of periodic payments and therefore will not be eligible for the deduction.

• The pension benefit must be attributable to services rendered by the individual (or the individual's spouse or common-law partner) to an employer in a period throughout which the individual was not resident in Canada.

• The pension benefit must be included in the individual's income for the year and not exempt from tax in Canada because of an income tax treaty. In this regard, the Act provides for pension benefits to be included in the recipient's income in the year received and the Canada-UK Income Tax Convention does not limit Canada's right to tax pension payments received from a UK pension plan by a Canadian resident.

The individual must make the RRSP contribution in the year the pension benefit is received or within 60 days after the end of that year. There is no requirement that the RRSP contribution be made by way of a direct transfer from the foreign pension plan. In addition, the individual must designate the RRSP contribution as a transfer in their personal income tax return for the year. The amount of the deduction is limited to the lesser of the amount designated and the amount of the benefit included in income. The deduction is over and above an individual's regular RRSP deduction limit.”