Where the death of an annuitant under an RRIF was followed very shortly by the death of the surviving spouse, CRA accepted that the (briefly) surviving spouse would qualify as an annuitant under the RRIF provided that the predeceased spouse had so designated the survivor by will or in the RRIF contract. The deemed inclusion of the fair market value of the fund property of the second-to-die of the two spouses could be reduced to the extent that there then was a transfer out of the fund to a financially dependent child or other eligible beneficiary (in which case, the eligible amount of the transfer was included in the transferee’s income under s. 146.3(5)(a).
Respecting this income inclusion to the eligible recipient and the ability to claim an offsetting deduction under s. 60(l) for a “Transfer Payment,” CRA stated:
Under clause 60(l)(v)(B.2), the amount of the deduction claimed by the Eligible Recipient cannot exceed the "eligible amount" of the Eligible Recipient for the year in respect of the RRIF. For the purposes of subparagraph 60(l)(v), the concept of "eligible amount" is defined in subsection 146.3(6.11) and represents, in general terms, the portion of the amount corresponding to the designated benefit less the minimum amount…under the fund for the taxation year. Thus, to qualify for this deduction, paragraph 60(l) provides that the Transfer Payment made by or on behalf of the Eligible Recipient must be made in the year or within 60 days of the end of the year in which the Eligible Recipient included a designated benefit in computing income by virtue of subsection 146.3(5).