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.
900931
M. Shea-DesRosiers
(613) 957-8953
June 8, 1990
Dear Sirs:
Re: Registered Retirement Income Fund ("RRIF")
This is in reply to your letters of March 2 and April 12, 1990 with documents attached wherein you request a technical interpretation concerning the tax treatment of a RRIF owned by the late 19(1)
The Will provides that the funds from any Registered Retirement Savings Plan ("RRSP") are to be held in Trust for the testator's son, with the stipulation that the testator's spouse may, during her lifetime, have the use of the interest or capital from such funds as she, in her sole discretion, may decide. The residue, if any, upon her death, is to form part of the residue of the testator's estate which is to be paid to the son.
The Will does not mention the transfer of the RRSP funds to a RRIF prior to the testator's death.
The RRIF contract does not designate the wife as the annuitant after the testator's death. That provision 24(1) has in fact been crossed off completely in the contract.
It is our opinion that, in the circumstances above described, the wife cannot become the annuitant under the RRIF plan on her husband's death because the money in the RRSP was left in trust for the son with powers of encroachment for the wife. The wife is not named the sole beneficiary of the RRSP. We would be asked to go beyond the testator's intention as stipulated in his Will.
As a result the testator is deemed, pursuant to subsection 146.3(6) of the Income Tax Act, to have received immediately before his death an amount out of the RRIF equal to the fair market of the property at the time of his death.
We trust the above comments will be of assistance to you.
Yours truly, for Director Financial Industries Division Rulings Directorate
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