Death of a RRIF annuitant

Amounts received from a RRIF upon the death of an annuitant can be transferred directly or indirectly to your RRSP, to your RRIF, to your PRPP, to your SPP or to buy yourself an eligible annuity if you were a qualified beneficiary of the deceased annuitant.

If you were a financially dependent child or grandchild of the deceased annuitant, you may be able to transfer the amount even if the deceased annuitant had a spouse or common-law partner at the time of death.

To transfer a refund of premiums to an RRSP, the qualified beneficiary must be 71 years old or younger at the end of the year the transfer is made.

The transfer or purchase has to be completed in the year the refund of premiums is received or within 60 days after the end of the year.

Sometimes there can be 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 may be issued for this amount.

If there is a decrease in the value of the RRIF between the date of death and the date of final distribution to the beneficiary or the estate, the deceased’s legal representative can ask that the amount of the decrease be carried back and deducted on the deceased’s final tax return through a reassessment. However, if the final distribution is made in the year of death, the deduction will be claimed when filing the final tax return.

The amount of the deduction is the total of:

• the part of the FMV of the RRIF at the time of death included in the deceased annuitant’s death income as a result of the annuitant’s death
• all amounts received after the annuitant’s death that have been included in the recipient’s income as a taxable payment from the RRIF, other than tax paid amount(s)
• all tax paid amount(s) (see box 36 of T4RIF slip)

       MINUS

• the total of all amounts distributed from the RRIF after death of the annuitant

See examples.

Generally, the deduction will not be available if the RRIF held a non-qualified investment after the annuitant dies or if the final distribution is made after the end of the year that follows the year in which the annuitant died. However, this rule may be waived to allow the deduction to deceased annuitants on a case-by-case basis.

Fill out your income tax and benefit return

The issuer who receives the transferred funds will issue a receipt to the qualified beneficiary. The beneficiary can use the receipt to claim a deduction on his or her tax return for the year the funds were received.

If you received these funds due to the death of your spouse or common-law partner, or if you were 65 or older on December 31 of the tax year in which you received the funds, report the amount on line 11500 of your return.

• If these funds are transferred to your RRSP, fill out and send a Schedule 7, RRSP, PRPP and SPP Contributions and Transfers, and HBP and LLP Activities, and deduct the amount on line 20800 of your return
• If the funds are transferred to a RRIF or to an annuity, deduct the amount on line 23200 of your return.

If you received these funds, other than due to the death of a spouse or common-law partner, or if you were not 65 or older on December 31 of the tax year in which you received the funds, report the amount on line 13000 of your return.

• If these funds are transferred to your RRSP, fill out and send a Schedule 7, RRSP, PRPP and SPP Contributions and Transfers, and HBP and LLP Activities, and deduct the amount on line 20800 of your return
• If the funds are transferred to a RRIF or to an annuity, deduct the amount on line 23200 of your return

Forms and publications

• Guide T4040, RRSPs and Other Registered Plans for Retirement
• Information Sheet RC4178, Death of a RRIF Annuitant, PRPP Member, or ALDA Annuitant
• Form T1090, Joint Designation on the Death of a RRIF Annuitant, PRPP Member, or ALDA Annuitant
• Guide RC4460, Registered Disability Savings Plan