Amounts paid from an RRSP or RRIF upon the death of an annuitant

Amounts received as a refund of premiums can be transferred directly or indirectly to your RRSP, or a RRIF, or to buy yourself an eligible annuity if you were a qualified beneficiary of the deceased annuitant.

Note
To determine if the amounts received qualify as a refund of premiums, see Death of an RRSP annuitant.

If, at the time of death, you are the deceased annuitant's spouse or common-law partner, or you are a financially dependent child or grandchild of the annuitant because of an impairment in physical or mental functions, you can transfer, tax-free, certain amounts paid from the annuitant's RRSP or RRIF.

Effective July 1, 2011, you can rollover the proceeds of a deceased annuitant's RRSP or RRIF to the RDSP of a financially dependent infirm child or grandchild. For special transitional rules, see Registered disability savings plan (RDSP).

If you are the child or grandchild of the deceased annuitant, and are not financially dependent because of an impairment in physical or mental functions, you can only transfer the amounts to a term annuity.

Note
For the purposes of this type of payment these comments above do not apply to the Saskatchewan Pension Plan (SPP).

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, the fair market value (FMV) of the property of an unmatured RRSP or 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 an unmatured RRSP or RRIF is less than FMV of the RRSP or RRIF at the time of the annuitant's death, a deduction may be claimed on the final return of the annuitant. For more information, see Death of an RRSP annuitant or Death of a RRIF annuitant.

Completing your tax return

The issuer who receives the transferred funds will issue an official receipt to the qualified beneficiary. The beneficiary can use the receipt to claim a deduction on his or her return for the year the refund of premiums was received.

Funds received from an RRSP:

• If these funds were transferred to an RRSP, complete Schedule 7, RRSP Unused Contributions, Transfers, and HBP or LLP Activities. Report the amount on line 240 and submit Schedule 7 with your return. Include the income on line 129 and claim the deduction on line 208 of your return.
  
  
• If these funds were transferred to a RRIF or an annuity, include the income on line 129 and claim the deduction on line 232 of your return.

If there is a decrease in the FMV of an unmatured RRSP between the date of death and the date of final distribution to the beneficiary or the estate, see Death of an RRSP annuitant.

Funds received from a RRIF:

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 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 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 there is a decrease in the FMV of a RRIF between the date of death and the date of final distribution to the beneficiary or the estate, see Death of a RRIF annuitant.

Forms and publications

• Guide T4040, RRSPs and Other Registered Plans for Retirement
• Information sheet RC4177, Death of an RRSP Annuitant
• Information sheet RC4178, Death of an RRIF Annuitant
• Form T1090, Death of a RRIF Annuitant - Designated Benefit for year 20__
• Form T2019, Death of an RRSP Annuitant - Refund of Premiums for 20__