| 19(1) | File No. 5-9627 |
| A. Adler | |
| (613) 957-8962 |
March 6, 1990
Dear Sirs:
This is in reply to your letter of February 19, 1990 in which you requested our views with respect to the payment of a refund of premiums from an RRSP prior to its maturity where the deceased annuitant thereof had both a legally married spouse and a common law spouse.
Given the expanded meaning of "spouse" under proposed subsection 146(1.1) of the Income Tax Act ("Act") in clause 13(6) of Bill c-52 that applies for purposes of paragraph 146(1)(a), (h) and (i.1) and 3(b) and subsections 146(8.8), (8.91) and (16) of the Act, and provided that this legislation is enacted as it is proposed, our comments follow.
In our view a financial institution may pay amounts that are a fund of premiums to each spouse of the annuitant, as a consequence of the annuitant's death, out of or under an RRSP of the annuitant prior to the RRSP's maturity as provided for under paragraph 146(1)(h) of the Act. Further, where beneficiaries of a deceased RRSP annuitant's estate are, or include, both of his legal and common law spouses then subsection 146(8.1) of the Act may, in our view, apply to permit the legal representative and the two spouses to designate jointly as provided in subsection 146(8.1) of the Act. Where this is the case then each spouse will be deemed thereunder to receive her portion of the relevant amounts paid to her in a year by the RRSP as a benefit that is a refund of premiums.
Presumably, an RRSP annuitant may choose to designate the spouse of his choice as the beneficiary of the RRSP. However, we are not in a position to comment upon any implication so this doing so under provincial legislation, for example, under family law legislation.
We trust that our comments will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate