RRSPs RRIFs and TFSAs -> Combining spousal and non-spousal RRSPs
Income Tax Act s. 146(8.3), (8.5), (8.6), (16)
Many people have both a spousal and a non-spousal RRSP, with the spousal RRSP no longer receiving contributions. In many cases it would be much more useful, and could perhaps save some administration fees, if the two accounts could be combined into one.
The Income Tax Act allows a taxpayer to combine their spousal and non-spousal accounts, but after the combination the account is a spousal RRSP. Both the taxpayer and their spouse can still make contributions to this account. If the taxpayer makes contributions, it is very important that the financial institution is aware of the source of the funds, so that the contribution receipt indicates that it is a taxpayer contribution, and not a contribution by the spouse. See Making an Online Spousal Contribution - Be Careful! The taxpayer can make withdrawals from this account without any income being attributed to the spouse, as long as the spouse has not made contributions to the account in the previous 3 years. If both the taxpayer and the spouse have made contributions in the past 3 years, any withdrawal will first be allocated to the income of the spouse, to the extent of the contributions made by the spouse. See RRSPs and RRIFs - Attribution Rules.
Example of withdrawal from the new combined spousal RRSP:
In the year of withdrawal, $1,000 will be included in the income of the taxpayer's spouse. The entire amount of $3,000 will be included in the income of the taxpayer, but a deduction can be claimed for the $1,000 that is included in the spouse's income.
To combine your spousal and non-spousal RRSPs, you simply need to call your financial institution and ask them to do this for you. They may require some paperwork to be signed. Make sure you ask if there will be a fee for doing this.
This information is discussed in the archived Canada Revenue Agency (CRA) interpretation bulletin IT-307R4 Spousal or Common-Law Partners' Registered Retirement Savings Plans (Archived).
Tax Tip: Keep the spousal and non-spousal RRSPs separate if both spouses might contribute in the future.
Revised: September 15, 2018
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