RRSP Spousal Rollover on Death: Rules for Ontario Survivors

If your spouse or common-law partner has died and you were named beneficiary of their RRSP or RRIF, the tax rules can work in your favour. The goal is usually to move the money into your own plan so tax is deferred.

This article walks through the main rules, the deadlines, and what changes if the estate is the beneficiary instead of you. Each situation turns on its details, so confirm the steps with an accountant or lawyer.

The default rule and the spousal exception

For an unmatured RRSP, the deceased is considered to have received the RRSP's fair market value at death, reported on the final return.

The exception helps survivors. If the spouse or common-law partner is the sole beneficiary and all RRSP property is transferred to a plan for the spouse by December 31 of the year after death, the deceased is not taxed on the RRSP value. The spouse reports the amount shown in box 18 of the T4RSP.

A legal representative can also reduce the amount on the final return using Chart 2 where a qualifying survivor receives a refund of premiums.

Rolling a refund of premiums into your plan

A surviving spouse or common-law partner can defer tax on a refund of premiums by transferring it to their own RRSP, PRPP, SPP, RRIF or eligible annuity. The transfer must be completed in the year received or within 60 days after the end of that year.

Age matters. To transfer a refund of premiums into an RRSP, you must be 71 or younger at the end of the year of transfer. Older survivors can use a RRIF or annuity instead.

On your return, you include the transferred amounts on line 12900. You deduct transfers to an RRSP on line 20800 (Schedule 7, line 24640) and transfers to a RRIF or annuity on line 23200.

If the deceased had a RRIF

If the RRIF contract or will names the spouse or common-law partner as successor annuitant, the deceased is not taxed on the RRIF value. The RRIF continues, and the survivor reports the payments.

Without a successor annuitant, the RRIF's fair market value is included in the deceased's income (T4RIF box 18). A spouse who receives a designated benefit can transfer it to their own RRSP, RRIF or annuity within the year or 60 days after it ends.

If the estate is the beneficiary

When the refund of premiums is paid to the estate, forms come into play. Form T2019 applies where a refund of premiums is paid to the estate. For a RRIF, Form T1090 is used where payments go to the estate.

The legal representative also has another option after a death. They may contribute to the surviving spouse's RRSP in the year of death or within 60 days after year-end and deduct it on the deceased's final return.

• Beneficiary named is you: a direct transfer is usually simpler.
• Estate named: the legal representative and you need to coordinate the forms and the tax reporting.
• Not sure who is named: ask the financial institution for the plan's beneficiary details.

What to do next

• Ask the financial institution who is named beneficiary or successor annuitant.
• Get the T4RSP or T4RIF slips and note the box 18 amount.
• Confirm your age, since it decides whether an RRSP transfer is allowed.
• Mark the deadlines on a calendar, including the 60-day window after year-end.
• Speak with an accountant or lawyer, especially if the estate is the beneficiary.

Frequently asked questions