Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: Does the Act confer a right on a person (who owes taxes under the joint and several liability provision of subsection 160.2(2)) to collect such taxes from the deceased annuitant's estate?
Position: No.
Reasons: There is no provision in the Act that provides for this.
XXXXXXXXXX 2000-002000
M. P. Sarazin
Attention: XXXXXXXXXX
July 6, 2000
Dear Sirs:
Re: Section 160.2 of the Income Tax Act (the "Act")
This is in reply to your letter of April 6, 2000, wherein you asked us to confirm that the person who has joint and several liability with the annuitant under a registered retirement income fund has no right of action under the Act to collect from the deceased annuitant taxes the person has paid under subsection 160.2(2) of the Act.
The provisions of subsection 160.2(2) of the Act provide that the recipient can be liable for the taxes of the deceased annuitant relating to the deemed RRIF benefit which is included in the deceased annuitant's income under subsection 146.3(6) of the Act. We note that the recipient can only be liable for the deceased annuitant's taxes that relate to the amount received by the recipient and not for the taxes that relate to amounts received by other beneficiaries out of the RRIF. This joint liability provision is required because the deceased annuitant is taxed on amounts that are not received and, as such, the deceased annuitant's estate may not have the funds to pay the taxes owing on such deemed receipts. Since the taxes relate to the tax-free property received out of the deceased annuitant's RRIF, the Act makes the recipient of the tax-free property jointly liable for the deceased annuitant's taxes that relate to such tax-free property.
We confirm your understanding that there is no provision in the Act that expressly confers a right on the recipient to collect the taxes paid under subsection 160.2(2) of the Act from the deceased annuitant's estate.
We trust these comments will be of assistance to you.
Yours truly,
Patricia Spice
for Director
Financial Industries Division
Income Tax Rulings Directorate
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