RRSP benefit and exempt period

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https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/completing-slips-summaries/t4rsp-t4rif-information-returns/death-annuitant/unmatured-rrsps/rrsp-benefit-exempt-period.html

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RRSP benefit and exempt period

Amounts included in an RRSP payout after the date of death that represent income realized from the date of death up to December 31 of the year after the year of death will always be an RRSP benefit to the recipient of the payment, regardless of when the amount is paid. This is the case whether the plan is a depositary, trusteed, or insured RRSP. If it is paid or considered to have been paid to a qualifying survivor, it will always be a refund of premiums.

Exempt period

We refer to the period from the date of death to December 31 of the year after the year of death as the exempt period. For example, if an annuitant dies on January 8, 2022, the exempt period will end on December 31, 2023.

The income earned or realized in the exempt period that is an RRSP benefit includes all of the following:

  • interest
  • dividends
  • capital gains and losses

Note

Capital gains and losses include the non-taxable part of the capital gain and the non-deductible part of the capital losses realized or incurred after the end of the exempt period.

The amount earned after the exempt period includes the same elements mentioned in the paragraph above. It may be an RRSP benefit or an after-tax amount if the payout is delayed. The RRSP benefit will be a refund of premiums if it is paid out of an insured RRSP to a qualifying survivor. Otherwise, the amount will be a tax-paid amount and may also be an after-tax amount.


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Date modified:
2024-01-18