30 November 1997 Ruling 9728223 - REFUND OF PREMIUMS

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:

Whether a transfer of funds from a deceased’s RRSP to a surviving spouse is a refund of premiums?

Position: Yes

Reasons:

In accordance with the definition of refund of premiums at 146(1).

XXXXXXXXXX 972822
XXXXXXXXXX

Attention: XXXXXXXXXX

XXXXXXXXXX, 1998

Dear Sirs:

Re: XXXXXXXXXX (the “Deceased”)
XXXXXXXXXX (the “Spouse”)
XXXXXXXXXX (the "Estate")
Advanced Income Tax Ruling

This is in reply to your letters dated XXXXXXXXXX wherein you requested an advanced income tax ruling.

FACTS

The facts as we understand them, are as follows:

1. The Deceased was born on XXXXXXXXXX. He was a resident of Canada when he died on XXXXXXXXXX at the age of XXXXXXXXXX.

2. The Deceased met the Spouse in XXXXXXXXXX.

3. From XXXXXXXXXX the Deceased and the Spouse co-habitated in the Deceased’s house located at XXXXXXXXXX.

4. In XXXXXXXXXX, the Spouse and the Deceased maintained separate residences, however the Spouse spent several days and nights with the Deceased at the XXXXXXXXXX residence.

5. In XXXXXXXXXX, the Deceased moved into the Spouse’s home and they co-habitated in a conjugal relationship until his death.

6. At the date of his death the Deceased was the annuitant of an unmatured Registered Retirement Savings Plan ("RRSP").

7. The Spouse instituted an action under the Succession Law Reform Act before the Ontario Court of Justice (General Division) (the "Court") against the Estate seeking: a constructive trust against the XXXXXXXXXX property, a declaration that she was the Deceased’s spouse and a distributive share of the Estate.

8. On XXXXXXXXXX the Court signed a court order:

a) declaring that the Deceased and the Spouse have been spouses as at XXXXXXXXXX; and

b) that the Estate pay $XXXXXXXXXX from the Deceased’s RRSP to the Spouse.

PROPOSED TRANSACTION

9. Pursuant to the terms of the court order the trustee of the Estate will transfer to the Spouse’s RRSP $XXXXXXXXXX from the Deceased’s RRSP.

PURPOSE OF PROPOSED TRANSACTION

10. The purpose of the proposed transaction involving the transfer of the RRSP funds is to settle the Spouse’s claim under the Succession Law Reform Act of Ontario and utilize the RRSP spousal rollover provisions of the Act to minimize the tax burden.

ADDITIONAL INFORMATION

11. To the best of your knowledge and that of the taxpayers involved, none of the issues in the ruling requested is being considered by a Tax Services Office or Taxation Centre in connection with a tax return already filed and none of the issues is under objection.

RULING

Provided that the above statement of facts and the proposed transaction are accurate and constitute complete disclosure of all the relevant facts and proposed transaction, we rule as follows:

The payment of funds from the Deceased’s RRSP as described in paragraph 9 above will be a refund of premiums as that term is defined under section 146(1) of the Act.

The above ruling is given subject to the general limitations and qualifications set out in Information Circular 70-6R3 dated December 30, 1996, issued by Revenue Canada and are binding provided that the transfer of funds occurs on or before XXXXXXXXXX.

Yours truly,

for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch

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