Estate & Wills · Registered accounts at death

A deceased person’s RRSP, RRIF & TFSA

Q: Is a TFSA taxed when the holder dies?

The value at the date of death is received tax-free up to the fair market value at that date. A successor holder — who can only be a spouse or common-law partner — keeps the TFSA going, and both the date-of-death value and income earned after death stay sheltered. A designated beneficiary (anyone) receives the date-of-death value tax-free, but any TFSA earnings made after the date of death and before the estate is settled are taxable.

Q: Who is a "qualifying survivor" for an RRSP refund of premiums?

Per the CRA, a qualifying survivor is the deceased’s spouse or common-law partner , or a financially dependent child or grandchild . When the amount goes to a qualifying survivor as a refund of premiums, it is generally not included in the deceased’s income, and a full rollover/deferral applies where the spouse or common-law partner is the sole beneficiary.

When someone dies in Canada, their RRSP, RRIF and TFSA are each handled differently by the CRA. One is added to the deceased’s income, one can simply continue, and one passes largely tax-free — but post-death growth can still be taxable. Here is exactly what happens to each account.

The short version

RRSPFair market value is included in the deceased’s income on the final return — unless it rolls to a qualifying survivor
RRIFContinues if a spouse is named successor annuitant — no income to the deceased for the RRIF
TFSADate-of-death value is tax-free; only post-death earnings can be taxed
SpouseBest outcome — a spouse or common-law partner unlocks the rollovers and successor designations

Estimate the tax at death

The big picture: value vs. growth

Three registered accounts, three different rules — but one principle ties them together. As a general matter, the value at the date of death is not taxed as income to the person who receives it, while growth that happens after death can be taxable. The one major exception is the RRSP: its fair market value is included in the deceased’s own income on the final return, not the recipient’s. Keep that framing in mind and each of the rules below makes sense.

This guide is part of the broader picture of settling an estate. For the whole process, see how to settle an estate, and for the related rule that taxes capital property and registered plans at death, see the deemed disposition.

RRSP at death: fair market value on the final return

For an RRSP, the CRA considers the annuitant to have received, immediately before death, an amount equal to the fair market value of all the property in the RRSP. That amount is reported as income on the deceased’s final (terminal) return. Because the entire balance lands in a single year, a large RRSP can push the final return into a high tax bracket.

There is important relief. The income inclusion does not apply where the amount qualifies as a refund of premiums paid to a qualifying survivor — defined by the CRA as the deceased’s spouse or common-law partner, or a financially dependent child or grandchild. And where the spouse or common-law partner is the sole beneficiary, a full rollover/deferral applies, allowing the RRSP to transfer on a tax-deferred basis rather than being cashed out and taxed.

RRIF at death: successor annuitant vs. designated beneficiary

The RRIF outcome depends on how it is set up. If the RRIF contract or the will names the spouse or common-law partner as the successor annuitant, that spouse simply becomes the annuitant and the RRIF continues — no amount is included in the deceased’s income for the RRIF. This is generally the cleanest result.

Alternatively, a designated beneficiary receives the amounts from the RRIF. A qualified beneficiary — for example a spouse — can transfer those amounts to their own RRSP or RRIF, continuing the deferral. Either route avoids the immediate income inclusion that would otherwise arise.

Watch post-death growth on a RRIF. If the value of the RRIF increases between the date of death and final distribution, that increase has to be included in the income of the beneficiary or the estate. The date-of-death value is handled under the rules above; the growth on top of it is the part that can become taxable.

TFSA at death: successor holder vs. designated beneficiary

The TFSA is the most tax-friendly of the three, but the labels matter. A successor holder can only be a spouse or common-law partner. With a successor holder, the TFSA simply continues, and both the value at the date of death and income earned after death stay sheltered from tax.

A designated beneficiary — who can be anyone — receives the value of the TFSA tax-free up to the fair market value at the date of death. However, any TFSA earnings made after the date of death and before the estate is settled are taxable. If there is no successor holder or beneficiary, the TFSA is paid to the estate.

One regional caveat is critical: Quebec does not recognize the TFSA successor-holder designation. Residents of Quebec should not rely on a successor-holder approach and should plan the TFSA alongside the will with local advice.

Why naming a spouse changes everything

Across all three accounts, a spouse or common-law partner unlocks the best outcomes: the RRSP rollover, the RRIF successor annuitant, and the TFSA successor holder. These designations let the accounts continue on a tax-deferred or tax-sheltered basis rather than being cashed out and taxed in the year of death. A financially dependent child or grandchild can also be a qualifying survivor for an RRSP refund of premiums.

This is why keeping beneficiary and successor designations current on each plan is one of the highest-leverage things you can do. Where no qualifying designation exists, the RRSP’s full fair market value is taxed on the final return and the other accounts default to the estate.

Where the tax actually gets reported

The RRSP income inclusion appears on the deceased’s final (terminal) tax return, filed by the executor. RRIF and TFSA post-death growth that is taxable is reported by the beneficiary or the estate, depending on who received it. To see how a registered balance stacks on top of other income at death, the estate tax calculator estimates the bill for your province, and the deemed disposition guide explains how the full RRSP/RRIF inclusion fits alongside capital gains.

Frequently asked questions

What happens to an RRSP when someone dies in Canada?

The Canada Revenue Agency considers the annuitant to have received, immediately before death, an amount equal to the fair market value of all the property in the RRSP. That amount is reported as income on the deceased’s final (terminal) return — unless it qualifies as a refund of premiums to a qualifying survivor (the spouse or common-law partner, or a financially dependent child or grandchild). Where the spouse or common-law partner is the sole beneficiary, a full rollover defers the tax.

Does the RRIF get taxed the same way as an RRSP at death?

Not necessarily. If the RRIF contract or the will names the spouse or common-law partner as the successor annuitant, that spouse becomes the annuitant and the RRIF simply continues — no amount is included in the deceased’s income for the RRIF. Alternatively a designated beneficiary receives the amounts, and a qualified beneficiary such as a spouse can transfer them to their own RRSP or RRIF.

Is a TFSA taxed when the holder dies?

The value at the date of death is received tax-free up to the fair market value at that date. A successor holder — who can only be a spouse or common-law partner — keeps the TFSA going, and both the date-of-death value and income earned after death stay sheltered. A designated beneficiary (anyone) receives the date-of-death value tax-free, but any TFSA earnings made after the date of death and before the estate is settled are taxable.

Who is a "qualifying survivor" for an RRSP refund of premiums?

Per the CRA, a qualifying survivor is the deceased’s spouse or common-law partner, or a financially dependent child or grandchild. When the amount goes to a qualifying survivor as a refund of premiums, it is generally not included in the deceased’s income, and a full rollover/deferral applies where the spouse or common-law partner is the sole beneficiary.

What happens to post-death growth in these accounts?

Growth after the date of death is where tax can creep back in. For a RRIF, if the value increases between the date of death and final distribution, that increase must be included in the income of the beneficiary or the estate. For a TFSA designated beneficiary, earnings after the date of death and before the estate is settled are taxable. The date-of-death value is generally not taxed to the recipient — the RRSP is the exception, where fair market value is included in the deceased’s income.

Does Quebec treat the TFSA successor holder the same way?

No. Quebec does not recognize the TFSA successor-holder designation. If you live in Quebec, the seamless continuation that a successor holder provides elsewhere does not apply, so it is especially important to plan the TFSA alongside the will and to confirm the approach with a Quebec notary or advisor.

This guide is for educational purposes only and is not legal, tax, or financial advice. The treatment of an RRSP, RRIF, and TFSA at death — including the refund of premiums, qualifying survivor, successor annuitant, successor holder, and the taxation of post-death growth — is a general summary of Canada Revenue Agency rules and can change. Quebec does not recognize the TFSA successor-holder designation, and individual situations vary. Confirm your plan with a qualified accountant, estate lawyer, or notary. Related: the estate tax calculator, the how to settle an estate overview, the deemed disposition guide, and the final tax return guide.