Section 75.2

Table of Contents

Administrative Policy

2020 Ruling 2020-0848231R3 F - Rollover of RRSP proceeds to a lifetime benefit trust.

annuity purchased by Hansen trust included in income of beneficiary rather than of Hansen trust

CRA ruled on the transfer of proceeds of the RRSPs of the deceased to a "lifetime benefit trust" described in s. 60.011(1) for the benefit of his mentally disabled surviving son, with the trustees then purchasing an annuity described in s. 60.011(2)(a). The rulings included that:

  • With the proper joint designations by the beneficiary (the son) and the executors, the amounts received out of the RRSPs would be deemed to be refunds of premiums in accordance with s. 146(8.1), and would be included in the beneficiary's income pursuant to s. 146(8).
  • The amount paid by the trustees to acquire the annuity would be deductible by the beneficiary in accordance with ss. 60(l) and 60.011(3).
  • During the lifetime of the beneficiary, each payment received under the annuity by the Trust would be included in his income rather than the Trust’s income pursuant to ss. 56(1)(d.2) and 75.2.
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Tax Topics - Income Tax Act - Section 60.011 transfer of RRSP proceeds to a lifetime benefit trust 370