RRIFs
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Income from a registered retirement income fund (RRIF)
When a person dies, they may have an RRIF. Depending on the situation, the amount you include in the deceased's income can vary.
If the deceased received payments from an RRIF for the period from January 1 to the date of death, report that income on the Final Return. If the deceased was 65 or older, or if the deceased was under 65 and received the RRIF payments due to the death of their spouse or common-law partner, see line 11500 – Other pensions or superannuation. In all other cases, enter the RRIF income on line 13000.
If the annuitant made a written election in the RRIF contract or in the will to have the RRIF payments continue to be paid to their spouse or common-law partner after death, that person becomes the annuitant and will start to get the RRIF payments as the new annuitant.
If the annuitant did not elect in writing to have the RRIF payments continue to be paid to their spouse or common-law partner, that person can still become the annuitant of the RRIF after the annuitant's death. This is the case if the legal representative consents to the deceased's spouse or common-law partner becoming the annuitant, and the RRIF carrier agrees to continue the payments under the deceased annuitant's RRIF to the surviving spouse or common-law partner.
A T4RIF slip will not be issued in the deceased annuitant's name for the fair market value (FMV) of the property at the time of death if all of the following conditions are met:
- All of the property held by the RRIF is to be paid to the surviving spouse or common-law partner (as specified in the RRIF contract or the will)
- The entire eligible amount of the designated benefit is directly transferred to the surviving spouse's or common-law partner's RRIF, RRSP, PRPP, SPP, RDSP, or to an issuer to buy an eligible annuity for the surviving spouse or common-law partner
- All the RRIF property is distributed before the end of the year following the year of death
In this case, the surviving spouse or common-law partner will receive a T4RIF slip, has to report the payment on their return, and is eligible to claim a deduction equal to the amount directly transferred.
For all other situations, the CRA considers that the deceased received, immediately before death, an amount equal to the FMV of the plan at the time of death. The FMV of the property is shown in box 18 of the T4RIF slip issued in the deceased's name. Include this amount in the deceased's income for the year of death. However, you may be able to reduce the amount you include in income. For more information, see Information Sheet RC4178, Death of a RRIF Annuitant, PRPP Member, or ALDA Annuitant, and Guide T4040, RRSPs and Other Registered Plans for Retirement.
Sometimes there is an increase in the value of a RRIF between the date of death and the date of final distribution to the beneficiary or estate. Generally, this amount has to be included in the income of the beneficiary or the estate for the year it is received. A T4RIF slip will be issued for this amount. For more information, see Chart 7 – Amounts from a deceased annuitant's RRIF, in Chapter 5 of Guide T4040, RRSPs and Other Registered Plans for Retirement.
Sometimes, the FMV of the property of a RRIF decreases between the date of death and the date of final distribution to the beneficiary or the estate. If the total of all distributions from the RRIF is less than the FMV of the property that was included in the deceased annuitant's income for the year of death, the deceased's legal representative can request that the difference be deducted on the deceased's Final Return. Generally, for the deduction to be allowed, the final distribution must occur by the end of the year that follows the year of death. For more information, see Information Sheet RC4178, Death of a RRIF Annuitant, PRPP Member, or ALDA Annuitant.
Rollover of proceeds from RRIFs and other plans to a registered disability savings plan (RDSP)
The existing RRIF rollover rules discussed in the previous section allow a specified RDSP payment from the deceased person's RRIF, RPPs, PRPPs, and SPPs to the RDSP of an eligible individual.
An eligible individual is a child or grandchild of a deceased annuitant under an RRSP or an RRIF, or of a deceased member of an RPP, an SPP, or a PRPP, who was financially dependent on the deceased for support at the time of the deceased's death, because of an impairment in physical or mental function.
A specified RDSP payment is a payment that meets all of the following conditions:
- The payment is made to an RDSP under which the eligible individual is the beneficiary
- The payment satisfies contribution conditions described in Guide RC4460, Registered Disability Savings Plan
- Effective March 19, 2019, if the eligible individual no longer qualifies for the disability tax credit, the payment is made before the end of the fifth taxation year throughout which the beneficiary is ineligible for the disability tax credit
For more information, see What is a registered disability savings plan (RDSP) or Information Sheet RC4178, Death of a RRIF Annuitant, PRPP Member, or ALDA Annuitant.
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