22 July 1993 Income Tax Severed Letter 9310655 - Restrictions on Successor RRIF Annuitant

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.

XXXXXXXXXX                                     931065
                                               P. Spice
                                               (613) 957-8953
Attention:  XXXXXXXXXX

July 22, 1993

Dear Sirs:

Re: Registered Retirement Income Fund ("RRIF")

This is in reply to your letter of April 8, 1993, in which you ask questions concerning the applicability of subsection 146.3(2) and paragraphs 146.3(1)(a) and (f) of the income Tax Act (the "Act") to a particular fact situation.

Written confirmation of the tax implications inherent in particular transactions are given by this Directorate only where the transactions are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R2. We can provide some general comments, however.

In order to qualify for registration, a retirement income fund must meet the definition in paragraph 146.3(1)(f) and the requirements of subsection 146.3(2) of the Act. If an annuitant, as defined in paragraph 146.3(1)(a) of the Act, designates in the arrangement constituting the retirement income fund, that a spouse is to be the recipient of a life estate in the RRIF property, that spouse is not a successor annuitant and the interest which passes on death will not be considered a retirement income fund. Furthermore, on the death of the annuitant, the property in the RRIF will be taxed in the annuitant's hands pursuant to subsection 146.3(6) of the Act since there is no portion of the RRIF property which becomes "receivable by (the) spouse". The spouse receives only a life estate and has no legal title to the RRIF property.

The foregoing comments are an expression of opinion only and are not binding on the Department. We hope, however, that they are helpful.

Yours truly,

for Director Financial Industries Division Rulings Directorate