Unused RRSP Contribution Room at Death

QuestionMark.jpgWhat happens if you die with unused RRSP contribution room?

Naturally you would be inclined to think that your legal representative would file an RRSP contribution for you for your final tax year, thereby reducing your terminal tax bill… But there is a slight problem with that. Your your legal representative cannot make RRSP contributions to your RRSP after the date of your death! It just isn’t allowed by the CRA.

What IS allowed, is for the legal representative to make a contribution to your spouse’s Spousal RRSP up to the first 60 days of the year following the year of your death. This has the same effect on your terminal taxes. The only caveat is that you had the room prior to the year you died as NO RRSP CONTRIBUTION ROOM IS GENERATED BY INCOME YOU EARNED IN THE YEAR THAT YOU DIE. All I can say is "BOO to that!".

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Preet Banerjee
Preet Banerjee
...is an independent consultant to the financial services industry and a personal finance commentator. You can learn more about Preet at his personal website and you can click here to follow him on Twitter.
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