- Without a rollover, an unmatured RRSP's fair market value is reported on the deceased's final return.
- A surviving spouse or common-law partner can defer tax by transferring a refund of premiums to their own plan in the year received or within 60 days after year-end.
- To transfer into an RRSP, the survivor must be 71 or younger at the end of the year of transfer.
If your spouse or partner has died and left an RRSP, the tax result can swing widely depending on who is named as beneficiary and what you do next. Done correctly, the money can move into your own plan without tax now.
This article walks through the usual steps, the deadlines and forms, and the role of the executor. Details depend on how the plan is set up, so confirm your situation with an accountant or lawyer.
The default rule and the exception
By default, for an unmatured RRSP the deceased is considered to have received the RRSP's fair market value at death, and it is reported on the final return. A legal representative can reduce this using Chart 2 where a qualifying survivor receives a refund of premiums.
There is an exception for a spouse. If the spouse or common-law partner is the sole beneficiary and all the 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.
Steps for moving the money into your own plan
- Find out who is named as beneficiary. Whether you are the sole beneficiary affects which rule applies.
- Ask the financial institution to pay a refund of premiums and issue the tax slip.
- Choose where it goes: you can transfer a refund of premiums into your own RRSP, PRPP, SPP, RRIF or eligible annuity.
- Complete the transfer in the year you receive it or within 60 days after the end of that year.
- Check your age. To transfer 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.
If the payment goes to the estate instead of to you, Form T2019 applies. Where the beneficiary is not you, the tax outcome can differ, so ask before any payment is made.
If the plan is a RRIF
A RRIF is the payout stage of an RRSP. If the RRIF contract or the 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, shown in box 18 of the T4RIF. 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. Form T1090 is used where payments go to the estate.
The executor's role and reporting the transfer
The executor, also called the legal representative, files the final return and can use Chart 2 to reduce the amount included when a qualifying survivor receives a refund of premiums. The executor may also 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.
On your own return, the survivor includes transferred RRSP 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.
| Item | Where it goes |
|---|---|
| Amount transferred, income inclusion | Line 12900 |
| Transfer to your RRSP | Line 20800 (Schedule 7, line 24640) |
| Transfer to a RRIF or annuity | Line 23200 |
| Refund paid to the estate (RRSP) | Form T2019 |
| Payments to the estate (RRIF) | Form T1090 |
What to do next
- Get the date of death and confirm the beneficiary designation on each plan.
- Note two dates: December 31 of the year after death, and 60 days after the end of the year you receive the payment.
- Confirm your age and choose between an RRSP, RRIF or annuity.
- Keep the tax slips (T4RSP or T4RIF) and give copies to the person preparing the final return.
- Ask an accountant to check the numbers before the returns are filed, especially if the estate, not you, is the beneficiary.
Frequently asked questions
Is the RRSP taxed when my spouse dies?
By default the RRSP's fair market value is reported on the deceased's final return. If you are the sole beneficiary and the property is transferred to a plan for you by December 31 of the year after death, the deceased is not taxed on it.
How long do I have to complete the transfer?
The transfer must be completed in the year the refund of premiums is received or within 60 days after the end of that year.
I am over 71. Can I still roll it over?
To transfer 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.
Does this apply to common-law partners?
Yes. The RRSP and RRIF rules refer to a spouse or common-law partner.
Sources
- CRA RC4177 – Death of an RRSP Annuitant or a PRPP Member — canada.ca
- CRA – Amounts paid from an RRSP or RRIF upon the death of an annuitant — canada.ca
- CRA RC4178 – Death of a RRIF Annuitant, PRPP member, or ALDA Annuitant — canada.ca
- CRA – Contributing to your spouse's or common-law partner's RRSPs — canada.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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