| 5-922340 | |
| 19(1) | P. Spice |
| 957-8953 |
September 16, 1992
Dear 19(1)
This is in reply to your letter of August 4, 1992, in which you ask for information concerning the bequeathing of property contained in registered retirement savings plans (RRSP's), registered retirement income funds (RRIF's), and life annuities purchased with registered funds ("eligible annuities"). You indicate that you have a son who is mentally disabled and you wish to know if he can inherit from you or his mother and enjoy any tax advantages.
Amounts received out of a RRSP or a RRIF as a consequence of the death of an annuitant may be received tax free by a spouse of the deceased annuitant if they are used to contribute to the spouse's RRSP or RRIF or to purchase an eligible annuity. If the deceased annuitant has no spouse, a mentally infirm child of the deceased who was financially dependent on the deceased may also receive amounts out of the RRSP or RRIF tax free where they are used to contribute to the child's RRSP or RRIF or to purchase an eligible annuity. Please see pages 38 and 45 of the enclosed Pension and RRSP Tax Guide for more information concerning these transfers on death.
There is no Income Tax Act provision which permits a spouse or dependent child to receive amounts out of an eligible annuity free of tax upon the death of the annuitant. Please see page 47 of the enclosed Guide concerning payments out of eligible annuities upon death of the original annuitant.
We trust this information is helpful to you. If you have any further questions, you may wish to contact your district taxation office at 360 Lisgar Street, Ottawa, Ontario, K1A 0L9, or by phone at 598-2275.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate