Cases
Curley v. MacDonald, 2001 DTC 5141 (Ont Sup CT J)
The estate of the deceased annuitant of an RRSP was liable for the income taxes payable as a result of the deemed benefit under s. 146(8.8). Only if the estate could not pay the taxes did s. 160.2(1) become relevant.
Slater v. Klassen Estate, 2000 DTC 6336 (Man. Q.B.)
In finding that the estate of the taxpayer, who was the annuitant under RRSPs under which his former wife was the beneficiary, was liable to income tax on his death based on the value of the RRSP at that time, Schulman J.A. stated (at p.6338):
"The intention of Parliament is shown to be that no matter who the payee of the funds, for purposes of payment of tax, payment is deemed to have been made to the annuitant, in this case Mr. Klassen, immediately before his death. In this manner, income tax is assessed at the same rate, no matter who the payee happens to be."
Schulman J. also found (at p. 6338) "that the payee referred to in s. 153 is the person deemed to have been the recipient of the funds under s. 146(8.8) ... ."
See Also
Murphy Estate v. The Queen, 2015 TCC 8
In his terminal return for his 2009 year, the taxpayer reported RRSP income of $256, 829 in respect of an RRSP for which his children were the heirs. Following litigation between his surviving spouse (Ms. DeMarsh) and those children, a consent judgment issued by the Supreme Court of Nova Scotia on May 13, 2011 provided that the children would transfer all interests they had in such RRSPs to Ms. DeMarsh.
In rejecting the appellant's submission that the consent order had the effect of confirming that the RRSPs had vested in Ms. DeMarsh on the deceased's death, V. Miller J noted that the order did not change the beneficiaries, and was not intended to be a rectification order and also noted that the stipulation that the children would transfer their interests in the RRSPS to Ms. DeMarsh implied that they accepted the gift of the RRSPs rather than disclaiming it. Accordingly, the RRSP proceeds were includible in the deceased's income under ss. 146(8.8) and (8).
She stated, at para. 33, that the effect of a disclaimer (being "a refusal to accept an interest which has been bequeathed to a disclaiming party") is "to void the gift as if the disclaiming party never received it."
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Effective Date | disclaimer has retroactive effect | 128 |
Administrative Policy
6 October 2017 APFF Financial Strategies and Instruments Roundtable Q. 2, 2017-0710681C6 F - Withdrawal of RRSP over-contributions after death
An individual, who made an excess contribution in 2015, dies in 2016. Will the excess contribution be added to the deceased’s income under ss. 146(8) and (8.8)? CRA responded:
Under subsection 146(8.8), where the annuitant of an RRSP dies before its maturity, the annuitant is deemed to have received, immediately before the annuitant’s death, as a benefit out of or under the RRSP, an amount equal to the fair market value ("FMV") of all the property of the RRSP at the time of death. … The fact that premiums paid to the RRSP prior to the time of death could not be deducted has no impact on the amount to be included.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 146 - Subsection 146(8.2) | deemed s. 146(8.8) benefit on death treated as RRSP withdrawal, and executor should not use Form T746 | 231 |
26 February 2003 External T.I. 2002-0163625 F - FONDS RESERVES GARANTIS AU DECES
When the annuitant died, the fair market value of the RRSP assets (a segregated fund) was $18,000. However, the contract provided a guaranteed value equal to the sum of the deposits made by the annuitant, which was $25,000. In finding that the deemed proceeds under s. 146(8.8) were $25,000, CCRA stated:
In a situation where there is a guaranteed amount to be paid by the plan upon the death of an annuitant, we are of the view that the fair market value of the plan's assets at the time of the annuitant's death cannot be less than that guaranteed amount. Thus, we consider the market value of the property in the plan to be the greater of the guaranteed amount and the value of the property held by the plan.
14 October 1997 External T.I. 9706535 - MUTUAL FUND VALUATION
In finding that the fair market value of mutual fund units held by an RRSP would take into account redemption fees, RC stated that "if units of a fund cannot be transferred between persons dealing at arm's length but must be redeemed, we would expect that the fair market value of the units would be their value otherwise determined less any applicable redemption charges".
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Fair Market Value - Shares | 66 |
19 August 1993 T.I. (Tax Window, No. 33, p.8, ¶2644)
Where the estate of the deceased is the beneficiary of an RRSP and the deceased's spouse has an interest in the RRSP only by virtue of being a life tenant under the will, s. 146(8.8) will apply to include the fair market value of the RRSP in the income of the deceased.
1992 A.P.F.F. Annual Conference, Q. 20 (January - February 1993 Access Letter, p. 58)
In light of the definition of "spouse" in s. 146(1.1), a deduction may be obtained under s. 146(8.8) for the transfer of a portion of an RRSP fund to a legal spouse (i.e., the surviving wife from whom the taxpayer was separated but not yet divorced) and to the transfer of the balance of the fund to a common law spouse.