Quote:
Originally Posted by 81MC
Hey, asking here because there seems to be a reasonable amount of people who are educated in law/finance here.
Ex and I have $xxxxx in RRSPs. Most of it in her name, some in a spousal RRSP in mine (but contributed technically through her). We're very amicable and have agreed to how that amount is to be split (50/50). We have a signed agreement to that effect.
Federal form T2220 for marital breakdown stipulates funds cannot be contributed for year of separation, plus two preceding years. Doesn't work so well as we both may be looking at using respective RRSP value for down payments before then.
Only alternative I can see is withdrawing X amount, splitting the 'cost' of withholding tax, and trying to calculate the hit she would take come tax time and paying out half of that. Anyone know for sure if the Withholding tax % applies to what would be taxed as income, or if the full amount would be taxed at her nominal interest rate regardless of whats withheld?
I hate the idea of potentially losing 30%+ to get this sorted out, since we both fully agree and I have no concern about any future legal matters or other stupidity. But I also really don't want to wait 2+ years to finalize the final aspect of our separation, let alone not have the autonomy of funds.
Thank you for any input or advice. Online otherwise seems to end at the t2220 timeline stipulation.
|
Are you talking about a marital separation of assets?
If so, as part of the settlement, you are able to move registered assets (RSPs) from one spouse to the other, without withdrawing them (and thus be subject to income tax).
But it has to be part of the divorce settlement.