# Spousal RRSP Question



## Koala (Jan 27, 2012)

If my spouse contributes to a spousal RRSP for me, and I withdraw from it the next year (while not working, or only working for part of the year with numerous tuition credits), is that money taxed as my income?

Are there any other penalties to consider?

What if that withdrawal was through the HBP? Could I choose to just not pay that back, and pay the taxes on the amount over 1 or 2 years instead of 15 years?

I'm just thinking that this strategy would make more sense than the traditional HBP for us.


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## Homerhomer (Oct 18, 2010)

No, the income belongs to the contributor, you will need to wait 3 (calendar) years to withdraw without income being attributed back to the contributor.


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## Koala (Jan 27, 2012)

Thanks! To bad we haven't started one yet! 3 years still seems like a reasonable method to some income splitting though.


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## balexis (Apr 4, 2009)

Here is a question I've had for a while now. In the following scenario, is the withdrawal attributed to the contributor or to the spouse?
Jan 1st 2000: contributor makes an initial deposit of 10 000$ to spousal RRSP
Jan 1st 2010: contributor makes a second deposit of 10 000$ to spousal RRSP
Jan 1st 2011: spouse withdraws 10 000$.


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## stardancer (Apr 26, 2009)

Income is attributed back to the contributor, because the last contribution was within 3 years. CRA doesn't consider that oldest $$ are withdrawn first. Any contribution counts towards attribution.


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## balexis (Apr 4, 2009)

Got it, thanks for the reply!


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## OptsyEagle (Nov 29, 2009)

Koala said:


> Thanks! To bad we haven't started one yet! 3 years still seems like a reasonable method to some income splitting though.


They will withdraw the money on a last in first out basis, so in order for you to be taxed on the withdrawal, no money can be contributed in the last 3 years. The only exception is if the RRSP is turned into a RRIF with a minimum withdrawal rate. So, there is a little more to it then just waiting 3 years.


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## Koala (Jan 27, 2012)

Thanks stardancer and OptsyEagle! I didn't pick up on that after quickly looking over the rules.
I'll have to read things over better before we really get into retirement planning. I was just hoping there would be something we could do with the RRSPs to help save some money when *hopefully* buying a house this upcoming year.


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## OptsyEagle (Nov 29, 2009)

As you can see, the government spent quite a bit of time ensuring that the spousal RRSP was to be used for retirement purposes and not just some tool a person uses to lower the taxes their family will pay.


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## RKS (Jan 12, 2013)

stardancer said:


> Income is attributed back to the contributor, because the last contribution was within 3 years. CRA doesn't consider that oldest $$ are withdrawn first. Any contribution counts towards attribution.


Is this on a per account basis, or doors the CRA only look at the overall contributions? For example:

2009: ING $10,000
2011: RBC $5000
2013: withdrawal $10,000 from ING


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## Koala (Jan 27, 2012)

The CRA uses the term 'any' most of the time in the RRSP withdrawal section, so I would assume it's not per account.


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## OptsyEagle (Nov 29, 2009)

The 3 year attribution rule is rendered against any withdraw from any account. It's based on your SIN numbers and the clock. Account numbers are irrelevant.


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## RKS (Jan 12, 2013)

I figured as much. Too bad as it would be great to be able to 'ladder' spousal RRSP accounts. Thanks for clearing that up.


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## rd_aaron (Jun 24, 2011)

OptsyEagle said:


> As you can see, the government spent quite a bit of time ensuring that the spousal RRSP was to be used for retirement purposes and not just some tool a person uses to lower the taxes their family will pay.


If you plan it properly, it's a good tool to use during a maternity leave. If the husband puts money away 3 years in advance of when they might have a kid, and then the wife goes on maternity leave (and presumably 55% of her regular income), she could pull out of the spousal RRSP at a lower tax bracket (assuming wife's 55% income is in a lower tax bracket than husband's 100% income).


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