My wife has contributed to spousal RRSP for me, but it is in an account I can not do much with at a credit union. I would like to transfer it to my non-spousal RRSP account at Questrade so I can have more investment options. Can I do this and if so, what are the implications and/or steps when filing taxes?
You can transfer RRSPs to another institution, but you can’t shake the spousal designation … once a spousal, always a spousal.
If the transfer is done directly from institution to institution (ie. assuming you do NOT withdraw from the credit union and redeposit it at Questrade), then there are no tax implications and there is nothing to you need to do at tax-time. A transfer is always initiated by the receiving institution, so call Questrade and tell them you want to transfer an existing RRSP to them … they’ll be more than happy to help.
Thanks, and I suspect then that if I do the transfer, my non-spousal RRSP will become a spousal. Is there any reason that would not be good for me?(any reason to prefer using RRSP over spousal RRSP)
In case Cardhu's answer wasn't absolutely clear, it would have to go into a separate account at Questrade. You can't combine it with your personal RRSP, because of the tax rules. (Actually, I seem to recall from an earlier thread that, theoretically, you can legally combine spousal and non-spousal RRSPs, but it creates an accounting nightmare. So it is not recommended and many institutions simply won't allow it.)
Last edited by OhGreatGuru; 2012-07-13 at 04:20 PM.
Interesting to know. Sadly, the spousal RRSP was setup inadvertantly in my name, on bad advice, costing us a loss of potential gains on our taxes last year...it should have been setup for my wife so that I could contribute (I am the higher income earner).
You can combine a spousal and regular RRSP account into one account, the combined account is considered a spousal account for tax purposes. I have one with itrade formerly SMDI. Not exactly sure what the accounting nightmare is unless this is in reference to withdrawls from the account and possible attribution.
Yes, you have to keep track of attribution for withdrawals. And financial institutions will typically only issue one T4(RSP) for the account, so you will have to argue with CRA how withdrawals should be attributed.
Also, the amount that can be contributed is governed by the Contributors' contribution room (as distinct from the annuitant) for a spousal RRSP, but by the annuitant's contribution room for a personal RRSP (where annuitant & contributor are the same person) . So mixing them is another source of accounting problems, and possible disagreements with CRA.
Last edited by OhGreatGuru; 2012-07-16 at 10:27 AM.
I think you should try to get the financial institution to correct this mess first.Originally Posted by victag
Not so sure this is a problem if you have the right brokerage firm and keep your tax slips & brokerage statements. In my spousal with itrade (formerly SMDI) my wife can contribute as a regular contribution and I contribute as a spousal. Contribution slips for income tax come to the respective contributors so we can deduct what we each have contributed. The brokerage statement tracks contributions as Personal (regular) and Spousal on a yearly basis so we always have a reference point if needed in addition to our NOA's.
Last edited by billiam; 2012-07-18 at 07:48 AM. Reason: spelling
More exciting details on how to combine spousal and "regular" RRSPs, including a link to the ITA circular on this matter, and how to instruct your brokerage: http://www.taxtips.ca/rrsp/combinespousalrrsp.htm
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