1 November 1994 External T.I. 9427585 - RRIF AT DEATH

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:

Can proceeds of an RRIF receivable by a designated beneficiary be right or thing where the said beneficiary dies before receiving an amount from the RRIF

Position TAKEN:

No

Reasons FOR POSITION TAKEN:

RRIF taxable for the last annuitant pursuant to 146.3(6) as 146.3(6.2) not applicable

		5-942758
XXXXXXXXXX		G. Martineau

Attention: XXXXXXXXXX

November 1, 1994

Dear Sirs:

Subject: Registered Retirement Income Fund ("RRIF")

This is in reply to your letter of October 24, 1994 in which you request additional information to our letter 5-942163 dated October 13, 1994.

The present wording of subsection 146.3(6) of the Act, applicable to deaths occurring after 1992, stipulates that, on the death of an RRIF last annuitant, the fair market value of the RRIF property at the time of the death is brought into the deceased's income for the year of death. The income inclusion may be reduced by the operation of subsection 146.3(6.2) of the Act which provides a reduction of the amount computed under subsection 146.3(6) of the Act where amounts paid out of or under the RRIF are designated benefits of an individual as defined pursuant to subsection 146.3(1) of the Act..

Where the surviving spouse of the RRIF last annuitant is the designated beneficiary under the RRIF contract, amounts paid out or under the RRIF, following the last annuitant's death, may be designated benefits in the following situations:

a)amounts are paid out directly to the surviving spouse,
or

b) amounts are paid out to the annuitant's legal representative (estate) and designated jointly by the legal representative and the spouse.

As the last annuitant of the RRIF and her spouse died the same day, the fair market value of the property in the RRIF must be included in the last annuitant income. This value would be reported in Box 18 on the T4RIF slip. Had the surviving spouse been designated successor annuitant of the RRIF, the fair market value of the property in the RRIF would have been included in the surviving spouse's income pursuant to subsection 146.3(6) of the Act.

In our view, subsections 70(1) and (2) of the Act are not applicable in your situation.

The above comments reflect an expression of opinion only and are not binding on the Department, as explained in paragraph 21 of Information Circular 70-6R2. We trust,however, that they are of assistance.

Yours truly,

for Director
Financial Industries Division
Rulings Directorate
Policy and Legislation Branch