24(1)
5-913484
W.C. Harding
(613) 957-8953
Attention: 19(1)
January 23, 1992
Dear Sirs:
Re: Registered Retirement Income Funds ("RRIFs")
This is in reply to your letter of December 16, 1991, in request of our opinions concerning the payment of amounts out of a RRIF to the spouse and children of a deceased annuitant of the RRIF.
Since your questions appear to relate to a factual situation, we are unable to reply to your queries at this time and without first having knowledge of all relevant facts and having the opportunity to review all relevant documentation. When questions relate to a proposed transaction our comments may only be provided where the proposed transactions are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R2 a copy of which is attached. Nevertheless, we can offer the following general comments which may be of assistance to you.
Under paragraphs 146.3(1)(f) and 146.3(2)(d) of the Income Tax Act (the "Act") an annuitant of an RRIF may elect in the plan or designate in a will that his or her spouse will continue as the annuitant of the RRIF after the initial annuitant's death. When this is done the provisions of subsection 146.3(6) of the Act will have no application on the death of the initial annuitant. Instead, the successor will become the annuitant as defined in paragraph 146.3(1)(a) of the Act. Subsection 146(6) of the Act will then have application on that spouse's death or at a later date should another spouse be subsequently named as annuitant.
With respect to the precluding of an annuitant's right to transfer funds in an RRIF as a consequence of that annuitant's death, we may advise that while the provisions of the Act do not appear to limit the existence of such provisions, the requirement that the RRIF must at all times comply with the conditions for its acceptance for registration must continue to be adhered to in accordance with the provisions of subsection 146.3(11) of the Act. Accordingly no conditions could be imposed which would restrict the annuitant's rights or obligations under the Act and in particular those rights and obligations contained in paragraph 146.3(1)(f) and subsection 146.3(2) of the Act.
We trust these comments are satisfactory to your needs.
Yours truly,
for DirectorFinancial Industries DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch