Canada Revenue Agency
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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, or to buy yourself an eligible annuity if you were a qualified beneficiary of the deceased annuitant.
Important notice
Effective July 1, 2011, you can rollover the proceeds of a deceased annuitant's RRIF to the Registered disability savings plan (RDSP) of a financially dependent infirm child or grandchild. For the special transitional rules, see Registered disability savings plan (RDSP).
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.
If you were financially dependent, but not because of a mental or physical impairment, the funds can only be transferred to a term annuity.
Important notice
Effective July 1, 2011, if you were a financially dependant infirm child or grandchild you can rollover the proceeds of a deceased annuitant's RRIF to your RDSP.
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 fair market value (FMV) 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.
Sometimes, the FMV of the property of a RRIF can decrease between the date of death and the date of final distribution to the beneficiary or the estate. If the total of all the amounts paid from a RRIF is less than the FMV of the RRIF at the time of the annuitant's death, a deduction may be claimed on the final return of the annuitant. The deductible amount will generally be calculated as the difference between:
- the FMV at the time of death that was included in the decedent's income for the year of death; and
- the total of all the amounts paid from the RRIF.
This applies where the final payment from the RRIF occurs after 2008. See examples.
The deduction will not generally 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 taxpayers on a case-by-case basis.
Completing your tax return
The issuer who receives the transferred funds will issue an official receipt to the qualified beneficiary. The beneficiary may be able to use the receipt to claim a deduction on his or her return for the year the funds were received.
If these funds were received due to the death of a 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 these funds on line 115 of your return.
- If these funds are transferred to your RRSP, complete and submit a Schedule 7, RRSP Unused Contributions, Transfers, and HBP or LLP Activities, and deduct the amount on line 208 of your return.
- If the funds are transferred to a RRIF or to an annuity, deduct the amount on line 232 of your return.
If these funds were not received 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 these funds on line 130 of your return.
- If these funds are transferred to your RRSP, complete and submit a Schedule 7, RRSP Unused Contributions, Transfers, and HBP or LLP Activities, and deduct the amount on line 208 of your return.
- If the funds are transferred to a RRIF or to an annuity, deduct the amount on line 232 of your return.
