Can the CRA Make an RRSP or RRIF Beneficiary Pay the Deceased's Tax in Canada?
This answer covers Canadian federal tax law, which applies in every province.
Yes, in some cases the CRA can pursue a beneficiary, but the tax is first the deceased's. When an RRSP annuitant dies, the full fair market value of the plan is treated as received immediately before death and is reported on the final return. A RRIF works the same way.
That amount is added to the deceased's other income for the year of death and taxed at graduated rates, with the 2026 federal rate reaching 33% above $258,482. If the estate cannot pay, a non-annuitant who received RRSP or RRIF money is jointly and severally liable for the part of the tax tied to that amount. Tax withheld on a payout may not cover what is owed.
This exposure does not arise in some cases. A spouse or common-law partner who is sole beneficiary and rolls the plan over by December 31 of the year after death is not taxed on a deemed receipt. A spouse named successor annuitant of a RRIF continues the plan. A refund of premiums paid to a qualifying survivor lowers the deemed amount on the final return. Provincial tax applies on top of federal rates, so a lawyer or accountant can confirm your numbers.
Key takeaways
- The full fair market value of an RRSP or RRIF is generally treated as received just before death and taxed on the final return.
- A non-annuitant who receives RRSP or RRIF money is jointly and severally liable for the part of the year-of-death tax tied to that amount.
- Tax withheld on a payout is not the final tax, so more may be owing when the income is reported.
- A spouse rollover, a RRIF successor annuitant or a qualifying survivor's refund of premiums can remove or reduce the deemed income.