Spousal RRSP

When a taxpayer contributes to Registered Retirement Savings Plan (RRSP) in the name of his/her spouse, it is regarded as spousal RRSP. When the RRSP Receipt is issued, the taxpayer’s name should appear as a contributor and his/her spouse should be named as annuitant. Annuitant is the one who is entitled to receive the income from such RRSP investments.

Spousal RRSP has following tax implications:

·         Taxpayer contributing into Spousal RRSP is entitled to a tax deduction on his/her tax return

·         Spousal RRSP reduces the RRSP limit of the contributing taxpayer

·         If the spouse withdraws from RRSP funds on or before three years from the date of its deposit, it is treated as an income of the taxpayer who invested and not the withdrawing spouse

·         After investing into Spousal RRSP, the RRSP issuer generally takes instructions from the spouse and not the taxpayer