# Individual to Joint account (JTWROS)



## sper17 (Aug 9, 2017)

Hello, I've been reading the forum for years and received a lot of good advice, but have never had to ask a question until now. I'm hoping someone can clarify what I'm doing and help me out with my understanding of investment accounts.

I've recently gotten married and decided to set up two Questrade JTWROS accounts (Joint tenants with right of survivorship) with the first in my name with my wife as secondary, and the second in her name with myself as secondary. This works well and it keeps the taxes simple as we both contribute to our own accounts and can claim any interest/dividends/capital gains on our own taxes, while avoiding the complications in probate if one of us were to die.

My confusion is that I had my own Questrade individual margin account set up previous to the marriage which I'd like to transfer into my new Joint account, but Questrade has told me I need a letter of direction to make this transfer (see below). I'm not sure if I need to do this in market as they suggest, or if this is in fact a gift to my wife although I want to ensure that I can still claim 100% of the capital gains on my taxes and not turn this into a 50/50 contribution account. I've asked customer service, but they can't give me advice on taxation. Any help would be greatly appreciated!

_
From Questrade:
"Please be advised that your request hasn't been processed as we could not find your Letter of Direction to transfer positions from your Individual account to your Joint account."

Since this transfer is a change in beneficial ownership, it should be conducted on market. If this transfer is intended to be a gift to the recipient account, please provide a letter of direction for this transfer request specifying the details of the request and that the transfer is intended to be a gift. The letter must be signed by all parties to the transfer"_


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## AltaRed (Jun 8, 2009)

That form letter from Questrade is a common one. It just needs a letter from you with the subject header "Letter of Direction" with a single line/paragraph that simply 'directs' them to transfer the assets of Individual Account A into JTWROS Account A. They don't know that the ownership of assets in your JTWROS account will still be 100% you and 0% spouse. JTWROS accounts by definition are undivided interest, so from their perspective, they don't know the actual splits in the account. That is for you to keep track of in your records for tax purposes.

There is no gifting to your wife involved, albeit if you die, she becomes 100% owner of JTWROS Accouht A.

Added: Brokerage folk and especially customer service never know about these sorts of things. They operate from a script.


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## sper17 (Aug 9, 2017)

AltaRed said:


> That form letter from Questrade is a common one. It just needs a letter from you with the subject header "Letter of Direction" with a single line/paragraph that simply 'directs' them to transfer the assets of Individual Account A into JTWROS Account A. They don't know that the ownership of assets in your JTWROS account will still be 100% you and 0% spouse. JTWROS accounts by definition are undivided interest, so from their perspective, they don't know the actual splits in the account. That is for you to keep track of in your records for tax purposes.
> 
> There is no gifting to your wife involved, albeit if you die, she becomes 100% owner of JTWROS Accouht A.
> 
> Added: Brokerage folk and especially customer service never know about these sorts of things. They operate from a script.


Thanks, that is exactly what I was looking for!


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## fireseeker (Jul 24, 2017)

AR, does this shift qualify as a change in beneficial ownership, requiring payment of cap gains taxes? Would Questrade report the "sale" to CRA?
We currently have two individual brokerage cash accounts and I have considered trying to make them JTWROS to simplify estate planning. But it's not worth doing if it requires a deemed disposition.


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## AltaRed (Jun 8, 2009)

fireseeker said:


> AR, does this shift qualify as a change in beneficial ownership, requiring payment of cap gains taxes? Would Questrade report the "sale" to CRA?
> We currently have two individual brokerage cash accounts and I have considered trying to make them JTWROS to simplify estate planning. But it's not worth doing if it requires a deemed disposition.


In the eyes of the brokerage and the issuers of the securities, there is a change in beneficial ownwership, i.e. two names now rather than one. But that is of no tax consequence. There is no deemed disposition when assets are moved in kind from one non-reg account to another non-reg account. There is nothing there that is considered a purchase or sale....and thus nothing should be on the T5008. 

Even if there was, and CRA queried you on it, there are no tax consequences because you'd just say you moved the assets to a JTWROS account for estate purposes and that the owner would still report income based on attribution rules, i.e. attributable back to the person who funded the investments. I've moved assets both ways in the distant past and just kept my paper records. There were no 'deemed dispositions' and no CRA queries.


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## fireseeker (Jul 24, 2017)

AltaRed said:


> In the eyes of the brokerage and the issuers of the securities, there is a change in beneficial ownwership, i.e. two names now rather than one. But that is of no tax consequence. There is no deemed disposition when assets are moved in kind from one non-reg account to another non-reg account. There is nothing there that is considered a purchase or sale....and thus nothing should be on the T5008.
> 
> Even if there was, and CRA queried you on it, there are no tax consequences because you'd just say you moved the assets to a JTWROS account for estate purposes and that the owner would still report income based on attribution rules, i.e. attributable back to the person who funded the investments. I've moved assets both ways in the distant past and just kept my paper records. There were no 'deemed dispositions' and no CRA queries.


That's really helpful insight. Thanks much.
-fireseeker


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