Principal Issues: 1) Whether a spouse or common law partner ("Spouse") of a deceased RRIF annuitant can be a RRIF successor annuitant where the Spouse dies shortly after the RRIF annuitant?
2) Whether it is possible to reduce the amount of the RRIF deemed benefit on death and include this amount in the Spouse's income when the Spouse died shortly after the deceased annuitant?
3) During which period shall the Minister reassess a taxpayer in order to take into consideration a reduction of an amount otherwise required to be included in computing the deceased's income, as permitted by subsection 146.3(6.2)?
4) When does an amount need to be paid by or on behalf of a taxpayer to a carrier as consideration for a RRIF in order to be deductible under paragraph 60(l)?
5) Is it possible to open a RRIF account for a deceased person?
Position: 1) Depends on whether the undertaking was made pursuant to subparagraph (b)(i) or (b)(ii) of the annuitant definition in subsection 146.3(1).
2) It might be possible if the amount meets the designated benefit definition in subsection 146.3(1). However, to be a designated benefit under paragraph (a) of that definition the joint election between legal representative and the individual must be done while the individual is alive.
3) Six years after the day of sending a notice of original assessment under Part I.
4) In the year or within 60 days after the year in which the taxpayer has included a designated benefit in its income pursuant to subsection 146.3(5).
Reasons: 1) If the annuitant has designated the Spouse as a successor annuitant of the RRIF in the RRIF contract or in his/her will, subparagraph (b)(i) applies at the time of death. However, the Spouse cannot be a successor annuitant under paragraph (b)(ii) of the annuitant definition in subsection 146.3(1) if the Spouse died before the RRIF carrier made the undertaking with the consent of the legal representative of the first deceased annuitant.
2) Where an amount is a designated benefit as defined in subsection 146.3(1), subsection 146.3(6.2) permits a reduction of the amount that a deceased annuitant is deemed to have received by subsection 146.3(6). In such a case, the amount received by the Spouse will be included in the Spouse’s income by virtue of subsection 146.3(5).
3) Paragraph 152(6)(f.3) requires the Minister to reassess the deceased's tax return if a reduction under subsection 146.3(6.2) is claimed. Pursuant to subparagraph 152(4)(b)(i), the reassessment for the adjustment in subsection 152(6) must be before the day that is 3 years after the end of normal reassessment period.
4) Preamble of paragraph 60(l).
5) Definition of RRIF and retirement income fund in subsection 146.3(1).