- For an unmatured RRSP, the full fair market value is generally included in the deceased's income on the final return.
- A surviving spouse or common-law partner, or a financially dependent child or grandchild with an impairment, may be able to roll the money over instead.
- A person who receives RRIF amounts because of the death can be jointly liable with the deceased for part of the tax.
A registered plan can be one of the largest assets a person leaves behind, and it can also produce the largest tax bill. Families are often surprised that the tax falls on the deceased's final return, not on the person who inherits the money.
This article explains how RRSPs and RRIFs are treated at death, how a spouse or named beneficiary changes the outcome, and what to confirm before money is paid out. A lawyer or accountant can confirm how this applies to a particular plan.
How an RRSP is taxed at death
For an unmatured RRSP, the deceased is treated as having received the fair market value of all property in the plan immediately before death. That amount is included in income on the final return and shown in box 34 of the T4RSP.
Because the amount is added to the deceased's other income for the year, it can push income into higher brackets. For 2026, the federal rates run from 14% on income up to $58,523 to 33% above $258,482. Ontario rates run from 5.05% on income up to $53,891 to 13.16% above $220,000 and apply in addition to the federal rates. Brackets are indexed each year, and Ontario tax can include other items beyond those bracket rates, so an accountant should run the numbers for the year of death.
When a rollover or beneficiary changes the result
| Who receives the plan | Tax result |
|---|---|
| Surviving spouse or common-law partner, paid directly to their RRSP, RRIF, PRPP, SPP or an eligible annuity before the end of the year after the death | No T4RSP is issued in the deceased's name, and the survivor reports the payment and claims an offsetting deduction |
| Estate is the beneficiary, and the survivor is entitled under the will | The survivor and legal representative can jointly elect in writing to treat the estate's payments as paid to the survivor, with the election attached to the survivor's return |
| Financially dependent child or grandchild with a physical or mental impairment | RRSP or RRIF payments can roll over to a registered disability savings plan (RDSP) |
| Other beneficiaries or the estate without a rollover | Generally taxed on the final return as described above |
Who is named on the plan matters, and the details of the rollover conditions can be technical. Confirm the beneficiary designation with the plan issuer before acting.
RRIFs, growth after death and Home Buyers' Plan balances
A RRIF follows a similar approach, with one important exception. A surviving spouse or common-law partner can continue as the new annuitant and keep receiving payments, either by a written election or with the legal representative's consent and the carrier's agreement, and in that case the full RRIF value is not taxed on the final return.
If an RRSP or RRIF grows in value after death and before final distribution, the beneficiary or the estate includes the increase in income for the year it is received, and a T4RSP or T4RIF is issued. If the value falls, the legal representative may be able to claim a deduction on the final return, generally if the final distribution happens by the end of the year after the death, and Form RC249 may be needed for a RRIF.
Balances still unpaid under the Home Buyers' Plan or Lifelong Learning Plan are included on line 12900 of the final return, unless the legal representative and the surviving spouse or common-law partner jointly elect to have the survivor continue the repayments.
Who can be held responsible for the tax
A person who receives RRIF amounts because of the annuitant's death is jointly and severally liable with the deceased for part of the deceased's tax for the year of death, which means CRA can collect that tax from the recipient.
The legal representative also has duties. Before distributing property, a representative must obtain a clearance certificate from the Minister, and distributing without one can lead to personal liability for unpaid amounts up to the value distributed. Balances owing to CRA are paid out of the estate's assets.
What to do next
- Find every RRSP and RRIF, and ask each issuer for the value at the date of death.
- Ask who is named as beneficiary or successor annuitant on each plan.
- Check whether a spouse, common-law partner or dependent child may qualify for a rollover.
- Hold back enough in the estate to cover the tax before distributing anything.
- Note the final return due date: April 30 of the next year for a death from January 1 to October 31, or 6 months after the death for a death from November 1 to December 31.
- Speak with a lawyer or accountant before paying out the plan or making an election.
Frequently asked questions
Is an RRSP taxed when the owner dies?
Generally yes. For an unmatured RRSP, the fair market value of the plan is included in income on the final return. If all the property goes directly to a surviving spouse or common-law partner's registered plan within the time limit, no T4RSP is issued in the deceased's name.
Who pays the tax, the beneficiary or the estate?
The tax on the RRSP amount falls on the deceased's final return, and balances owing to CRA are paid from the estate's assets. A person who receives RRIF amounts can also be jointly liable for part of the tax.
Does a spouse always avoid the tax?
Not automatically. The payment has to go to the survivor's RRSP, RRIF, PRPP, SPP or an eligible annuity before the end of the year after the death. A spouse can also continue a RRIF as the new annuitant.
Is a TFSA treated the same way?
No. The holder is considered to have received the account's fair market value before death, but no TFSA income is reported on the final return, and earnings after death are taxable to the beneficiaries when they receive them.
Sources
- CRA – Transfer and report RRSPs (someone who died) — canada.ca
- CRA – Report RRIF income (someone who died) — canada.ca
- Income Tax Act, s. 160.2 (Justice Laws) — Justice Laws (federal)
- CRA – TFSA (someone who died) — canada.ca
- CRA – Filing and payment due dates (someone who died) — canada.ca
- CRA – Current year tax rates and income brackets (2026) — canada.ca
- CRA – Represent someone who died — canada.ca
- Income Tax Act, s. 159(2) (Justice Laws) — Justice Laws (federal)
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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