Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
7-4533
19(1) W.C. Harding
613-957-3499
January 26, 1990
Dear Sir:
Re: Registered Retirement Savings Plans (RRSPs)
Proceeds on death
This is in reply to you letter of September 29, 1989 in respect of the above-noted topic which was referred to us for reply by our Assessing and Enquiries Directorate.
In the circumstances where an annuitant of an RRSP has died and the spouse was named beneficiary of the plan he or she could in our opinion renounce her rights as the beneficiary. In this case the property of the plan would flow to the estate of the annuitant for subsequent distribution in accordance with the terms of the estate.
It, however, should also be noted that the provisions of subsection 146(8.8) of the Income Tax Act (the "Act") will have application to these events such that the fair market value of all of the property of a plan at the time of an annuitant's death must be included in his income immediately before his death to the extent that it exceeds the portion thereof that becomes receivable by his spouse as a consequence of his death. Accordingly, where the spouse of a deceased RRSP annuitant has renounced all of her rights under the plan, the full value of the plan will be taxable to the annuitant.
With respect to income earned by an RRSP after an annuitant's death, we refer you to paragraph 19 of Interpretation Bulletin IT-500.
We apologize for the delay in replying to you letter.
Yours truly,
for Director
Financial Industries Division
Rulings Directorate
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