Financial Planning -> Disabilities -> RDSPs -> Roller of RRSP, RRIF or RPP to an RDSP
Rollover of RRSP, RRIF or RPP to a Registered Disability Savings Plan (RDSP)
Income Tax Act s. 60.02
Budget 2010 revised the Income Tax Act to allow a tax-deferred rollover of a deceased individual's RRSP/RRIF or RPP proceeds to the Registered Disability Savings Plan (RDSP) of a financially dependent infirm child or grandchild. This was effective for deaths occurring on or after March 4, 2010. The actual transfer to the RDSP, however, could not be made until after June 2011.
Previously, the proceeds could only be received on a tax-deferred basis by a financially dependent infirm child or grandchild under 18 years of age by a transfer to the RRSP, RRIF or eligible annuity of the child or grandchild.
The Sustaining Canada's Economic Recovery Act, Bill C-47, was introduced in the House of Commons on September 30, 2010, including the legislation for the rollover to RDSPs, and received Royal Assent (became law) on December 15, 2010.
Who is Eligible?
An eligible individual:
What Proceeds are Eligible?
Eligible proceeds means any of
that is received by an eligible individual as a result of the death, after March 3, 2010, of a parent or grandparent of the eligible individual.
Specified RDSP Payment
A specified RDSP payment:
Transitional Eligible Proceeds
Where the death of the RRSP or RRIF annuitant or RPP member occurred after 2007 and before 2011, transitional rules apply that recognize that individual estate plans may not have been amended to reflect the new rules.
Transitional eligible proceeds include an amount received as a result of the death after 2007 and before 2011 that is:
These transitional rules apply where the deceased individual may have provided a bequest directly to the eligible individual, to the spouse or common-law partner of the deceased, or to another beneficiary. These rules allow this beneficiary to contribute to the RDSP of an eligible individual. If the bequest had been included in the income of a taxpayer, for instance the recipient or the deceased, then a deduction will be allowed for the contribution of the transitional eligible proceeds to the RDSP.
Where the death occurred after 2007 and before 2011, the contribution to the RDSP must be made before 2012.
See also Canada Revenue Agency RDSP Limits, Transfers and Rollovers.
Back to RDSP main page
Revised: February 03, 2021
Copyright © 2002 Boat Harbour Investments Ltd. All Rights Reserved. See Reproduction of information from TaxTips.ca