In a June 6, 2017 French Technical Interpretation (2015-0617331E5, Roy, Louise), CRA considered whether the transfer of a deceased’s TFSA to their spouse could constitute an exempt contribution. To the extent the payment is made in accordance to the will, CRA opined that the payment is made as a result of the individual’s death.


In  a  June  6,  2017  French  Technical Interpretation  (2015-0617331E5, Roy, Louise), CRA  considered  whether  the  transfer  of  a deceased’s TFSA to their spouse could constitute an  exempt  contribution.  To  the  extent  the payment  is  made  in  accordance  to  the  will, CRA opined that the payment is made as a result of the individual’s death.  The amount may still qualify as an exempt contribution regardless of  whether  it  is  paid  directly  to  the  deceased’s  spouse,  or  first  to  the estate, and then the deceased’s spouse.CRA also opined that the payment could be an exempt contribution where it  related  to  a  debt  due  to  the  division  of  family  property,  the dissolution  of  the  matrimonial  regime,  a  gift  made  by  marriage contract,  or  a  post-mortem  support  obligation.  An  exempt  amount must be paid during the rollover period (must occur by the end of the calendar year following the death), and the amounts must be  distributed as a consequence of the individual’s death.An  exempt  contribution  allows  for  an  addition  to  one’s  TFSA  account without reducing the available contribution room.


Where an estate, trust or beneficiary acquires a right or thing upon a taxpayer’s death, several tax consequences may arise, as follows:

  • the  value  may  be  included  in  the  deceased  taxpayer’s  final income tax return (Subsection 70(1));
  • the  value  may  be  reported  in  a  separate  elective  return(Subsection 70(2)); or
  • the  value  may  be  taxed  when  ultimately  received  by  the beneficiary who inherits it (Subsection 70(3)).

The  beneficiary  will  be  taxable  where  a  right  or  thing  has  been transferred  or distributed  to a beneficiary  within the prescribed  time limit, no later than one year after the date of death or 90 days after the date of mailing of any notice of assessment or reassessment in respect of the year of death, whichever is later.  Where this requirement is met, the tax  liability  arises when the beneficiary  realizes  or disposes of the right or thing.  See  Interpretation Bulletin IT-212R3, Income of Deceased Persons – Rights or Things, for more information on these items.

In a June 28, 2017 French  Technical Interpretation  (2016-0653921E5, Allaire, Lucie), CRA was asked whether a testamentary trust  could be a beneficiary  of an estate  or a person beneficially interested in an estate for these purposes.

A deceased artist had previously made an election to value their artistic inventory at nil (Subsection 10(6)), allowing the individual to deduct the costs associated with the inventory in the year incurred rather than when the inventory is sold.  The artwork is considered a right or thing.  Upon the individual’s death, the artwork was bequeathed to a testamentary trust.

CRA opined that the testamentary trust could be a beneficiary of an estate or a person beneficially interested in an estate.  Therefore, if  no election  were  made  to  report  the  deceased’s  rights  or  things  in  a separate  return  (Subsection  70(2)),  the  income  inclusion  could  be deferred until when the artwork was disposed of by the testamentary trust.


In  a  May  30,  2017  Federal  Court  case  (Flaig  vs.  Attorney  General of Canada, T-538-16),  at issue was whether the taxpayer could  obtain CPP survivor  benefits  retroactive  to  the  date  of  her  husband’s  death  in 2007. The taxpayer made the application for the CPP survivor benefit in 2012.  Benefits were provided back to 2011, not the requested date in 2007.

Taxpayer loses The Court opined that as the taxpayer did not demonstrate that she was incapable of forming or expressing an intention to make an application for survivor  benefits  before  she  actually  made  the  application,  she  was unable  to  go  back  beyond  the  standard  1-year  retroactive  look back period for the benefits.


An August 10, 2017 Globe and Mail article (Why women (especially) should delay taking CPP,  by Bonnie-Jeanne MacDonald) discussed the merits of deferring application for CPP until age 70. This increasesthe monthly benefits by 42% over collecting at age 65.The article noted that a 65 year old woman  today can expect to live for 22 years, three years longer than a male. Deferring CPP to age 70 will result in total benefits about 9.7% greater than collecting at age 65.For a male, the increase would be about 6.1%.

The  article  also  noted  further  reasons  to  draw  extra  funds from an RRSP from age 65 to age 70 and defer CPP application, including the following:

  1.  reduced investment risk  as the funds to be withdrawn from the RRSP would presumably be held in low-risk assets;
  2. inflation protection as CPP is fully indexed;
  3.  reduced risk of outliving one’s retirement income, as CPP is guaranteed for life;
  4. less stress from managing investments; and
  5. reduced  exposure  to  fraud    and  to  pressure  from  relatives seeking loans – by reducing accessible savings.

The article noted that women  tend to be more  risk-averse, leading to a preference  for  the  guaranteed  income  provided  by  CPP.  It  also  noted many other considerations  which may suggest  collecting CPP earlier, such as an expectation of a shorter lifespan.

Finally,  the  article  suggested  that  women  expecting  to  be  eligible  for Guaranteed Income Supplement  (GIS) payments should  apply  for  CPP at age 60 as CPP will erode their GIS eligibility. As well, lower income seniors tend to have shorter lifespans.