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 spousal trust can be an annuitant.
Position:
No.
Reasons:
Definition of "annuitant" does not include a spousal trust.
XXXXXXXXXX 5-981864
P. -A. Sarrazin
November 27, 1998
Dear XXXXXXXXXX:
Re: Transfer of RRIF to spousal trust on death
This is in reply to your letter of July 20, 1998, in which you requested our comments on whether a spousal trust resident in the United States could be named as a beneficiary of a Registered Retirement Income Fund ("RRIF").
In this case, the U.S. spousal trust would receive the RRIF payments and would distribute them to the annuitant's spouse.
It appears that the opinion you seek relates to specific proposed transactions and, therefore, we must bring to your attention Information Circular 70-6R3 dated December 30, 1996, issued by Revenue Canada. Confirmation of tax consequences with respect to proposed transactions involving specific taxpayers will only be provided in response to a request for an advance income tax ruling.
The definition of annuitant in subsection 146.3(1) of the Income Tax Act (the Act) clearly provides that an annuitant under a RRIF can only be:
(a) the first individual to whom a carrier has undertaken to make payments described in the definition retirement income fund;
(b) after the death of the first individual, a spouse of the first individual; and
(c) after the death of the surviving spouse described in (b) above, another spouse of the surviving spouse.
Subsection 146.3(6) provides that, where the last annuitant under a RRIF dies, that annuitant shall be deemed to have received, immediately before death, an amount out of or under a RRIF equal to the fair market value of the property of the RRIF at the time of death. Thus, except in circumstances where the annuitant's spouse is the successor annuitant of the RRIF after the initial annuitant's death, the fair market value of the RRIF property is brought into the deceased's income for the year of death.
We trust that these comments will be of assistance.
Yours truly,
Paul Lynch
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
Attachment
??
2
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1998
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1998