7 March 1990 External T.I. 59360 F - Death of Last Annuitant under RRIF

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.

March 7, 1990

Dear Sirs:

This is in reply to your letter dated December 19, 1989 in which you requested our views concerning the application of subsection 146.3(6) of the Income Tax Act ("Act") to three possible scenarios occurring after the death of the annuitant under a RRIF.

In scenario one the spouse has been named as the successor annuitant of the RRIF on the plan application, or in the will of the deceased annuitant. We agree that subsection 146.3(6) of the Act does not apply in this situation since the last annuitant under the RRIF has not died as required therein.

In scenario two the spouse is not named as successor annuitant of the RRIF but is named as beneficiary either on the plan application, or specifically in the will of the deceased annuitant. We agree that no amount will be taxable to the deceased annuitant under subsection 146.3(6) of the Act. Further, it is our position that the fair market value of the RRIF property on the date of the deceased annuitant's death would be an amount included in the surviving spouse's income for purposes of subsection 146.3(5) of the Act. The surviving spouse may transfer such amount to her own RRSP (if under age 71), to a RIFF, etc. as, and to the extent, provided for under paragraph 60(1) of the Act.

In scenario three the surviving spouse is neither named as beneficiary on the RIFF application, nor in the will; however the spouse is the sole beneficiary of the will. 

This Department has established an administrative procedure for the review of cases where (i) an election is not made in respect of the surviving spouse under a RRIF to have that spouse be the RRIF annuitant or (ii) a designation is not made under the will to have the surviving spouse be the beneficiary of the RRIF property. In such cases taxpayers are to submit complete details in writing and a copy of the deceased annuitant's will to the Chief of Verification and Collections in their local district taxation office for consideration.

We trust that our comments are sufficient for your purposes.

Yours truly,

for DirectorFinancial Industries DivisionRulings Directorate