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 a RRIF successor annuitant renounce his or her rights under the RRIF so that RRIF property is taxed in the hands of the original RRIF annuitant on death?
Position: No.
Reasons: There is no provision in the Act to allow for the renunciation of RRIF rights under the contract by a successor annuitant.
XXXXXXXXXX 983322
M. P. Sarazin
Attention: XXXXXXXXXX
March 1, 1999
Dear Sirs:
Re: RRIF Successor Annuitant and Renunciation of Rights
This is in reply to your letter dated December 14, 1998, wherein you requested a technical interpretation regarding a registered retirement income fund’s (“RRIF”) deceased annuitant’s surviving spouse being able to renounce his or her rights as successor annuitant under the RRIF in order to have the full value of the RRIF taxed in the hands of the deceased annuitant on death.
Subsection 146.3(1) of the Income Tax Act (the “Act”) defines retirement income fund as an arrangement between a carrier and an annuitant under which the carrier agrees to make payments to the annuitant and, if elected by the annuitant, to the annuitant’s spouse after the annuitant’s death, in consideration for the transfer of property to the carrier. Annuitant is defined in subsection 146.3(1) of the Act to include, after the death of the first annuitant, a surviving spouse of the first annuitant to whom the carrier has undertaken to make payments described in the definition of “retirement income fund” out of or under the fund after the death of the first annuitant. We note that there is no provision within the Act allowing a successor annuitant to renounce or negate the contractual arrangement between the original annuitant and the carrier. Consequently, the surviving spouse would become the annuitant under the RRIF and would be required to include any amounts received from the RRIF in his or her income.
We trust that our comments will be of assistance.
Yours truly,
Paul Lynch
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
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