Question about Canadian taxes vs spousal transfers and loans

It’s understood that nobody on the board is acting as a financial or tax advisor. I just wanted to see if anyone has experience with this.

Spouses A and B have similar incomes and are in the same tax bracket. Both still have some legroom for RRSP contributions for 2021 (say 70 grand each).

Spouse A has just come into a significant amount of money (about 200 grand), as a non-taxable lump sum, and intends to max out their own RRSP in 2021 (knowing that their deduction will actually be spread out onto the next 2 or 3 years).

There’s still a lot of money left. What to do ?

(1) It’s not possible for Spouse A to contribute to Spouse B’s RRSP, because Spouse A’s contribution limit applies in that case.

(2) If Spouse A simply gives 70 grand to Spouse B and then Spouse B invests that in an RRSP, the tax people would consider that it’s Spouse A’s money, so it wouldn’t work. Correct ?

(3) I’ve read that it’s possible for Spouse A to make a loan to Spouse B, under specific conditions. Apparently the interest rate must be at least the “prescribed” rate (currently 1%) and it’s necessary to make sure that the money remains traceable and that the payments on the loan are made in a very manifest way (using cheques rather than a joint bank account, for instance) before Jan. 30th of each year. Spouse B can then invest the money on their side, again in a traceable way.

But case (3), from what I’ve read, is typically used to take advantage of Spouse B’s lower tax bracket for taxable investment revenue. In the case we’re looking at, A and B are in the same tax bracket, so there’s little advantage there.

But is Spouse B allowed to contribute to their own RRSP using this money, and take a deduction accordingly ? The articles never talk about this, even though it’s a pretty obvious question.

Not a direct answer to your question, but have both spouses maxed out their TFSA? Could be some good room for growth there, and no tax implications on the profit.

Yes, that’s in the plans too. Spouse A has maybe 10 grand of headroom in their TFSA and is planning to max it out by year’s end; Spouse B’s TFSA is already maxed out.

I personally don’t understand why our taxation rules and divorce rules don’t match up. If I make more than my spouse and we divorce “what’s mine is yours” is the rule, but for investments CRA has attribution rules.

I don’t know but nearly all our money is in joint accounts and what do CRA and Revenu Quebec know from where my RRSP payments used to come from (when I was making them). Also, can’t spouse A simply pay all the household expenses, leaving B with enough extra. The authorities can never sort all this out.