Scotiabank to pay for costly RRSP mistake

Due to mistakes made by Scotiabank on a routine RRSP transaction, a man in Nova Scotia was recently saddled with a tax bill of $35,000—which the bank has agreed to cover, CBC News reports.

Patrick MacDonald, 54, lost his wife in 2008. CBC reports that, as an executor of his late partner’s will, the man asked his local Scotiabank branch in Antigonish, N.S., to transfer her RRSP into his, which is a common transaction when a spouse passes away.

However, the bank lost MacDonald’s paperwork and thus was unable to transfer the money before a one-year deadline, after which his spouse’s funds couldn’t be released anymore and became fully taxable, according to CBC News.

As a result, MacDonald incurred penalties from the Canada Revenue Agency and was slapped with a tax bill of more than $35,000. The outlet reports that, originally, the bank refused to cover this cost, but later, due to its inquiries, Scotiabank offered to pay the widower $37,000.