Can I give money to my wife to invest?

[duner]

Hi, I am in the highest tax bracket, and my wife doesn't work outside the home.

I was wondering if I could give her money to invest so that any money she makes off those investments wouldn't be taxed, or at least taxed at a much lower rate.

[ghostryder]

Hi, I am in the highest tax bracket, and my wife doesn't work outside the home.

I was wondering if I could give her money to invest so that any money she makes off those investments wouldn't be taxed, or at least taxed at a much lower rate.

Yes, but...

any interest or dividends earned on the money would be attributed to you for tax purposes.

There is no attribution with respect to capital gains.

You can contribute to a spousal RRSP. There is no attribution on this. I believe you will also be able to fund a TFSA without the attribution rules applying.

[duner]

So if i contribute to a spousal RRSP, do I get to claim the tax break?

[br0pbr0p]

So if i contribute to a spousal RRSP, do I get to claim the tax break?

Yes. When you make the RRSP contribution, make it to an account in your wife's name instead of yours.

[duner]

Thanks,

That should hold me over for a few years re: what to do with excess cash. And the TFSA makes sense, since no tax will be charged, it can't be applied to me .

[83_gemini]

Depending on how much money you have you could do a variety of other intriguing tax avoidance procedures (the CRA's view on this varies ).

I didn't know the TFSA is exempt from attribution too.

If you have kids I believe there are certain transfers you can make to them too that could be advantageous.

As usual consult your local accountant and/or lawyer before engaging in serious tax avoidance.

[Thalo]

-You can contribute to a spousal RSP, the money is invested in her name and eventually becomes her retirement income, you get the tax deduction this year.

-You can give her money to contribute to her own RRSP and this won't be attributed back to you as there is no tax until it is withdrawn.

-You can give her money to invest in a Tax Free Savings Account (in January) and again there is to attribution as this investment wouldn't be taxed at all.

-You can loan her money at the prescribed interest rate (see CRA website or talk to an accountant) and she can invest it. Investment income isn't attributed back to you but she has to pay you interest, which she can deduct but that you have to pay tax on.

-You can devote your income to paying all of your living expenses, leaving her to invest 100% of any income that she earns or gets from the government.

[sunnyminz]

So if i contribute to a spousal RRSP, do I get to claim the tax break?

Yes you do get a tax break just as if you were to contribute into your own RRSP, but if your wife doesn't work outside of home then she might not have too much contribution room because you can only contribute 18% of your spouse's income for the year, you might want to check her last year's Notice of Assessment to see what her limit was then and keep that in mind before you start putting money into her RRSP.

Also your spouse can't withdraw the money out from the plan until 2 calendar years after your last contribution and if she does withdraw before the 2 calendar years, it'll be considered as your income and you will taxed at it accordingly.

[Thalo]

Yes you do get a tax break just as if you were to contribute into your own RRSP, but if your wife doesn't work outside of home then she might not have too much contribution room because you can only contribute 18% of your spouse's income for the year, you might want to check her last year's Notice of Assessment to see what her limit was then and keep that in mind before you start putting money into her RRSP.

Also your spouse can't withdraw the money out from the plan until 2 calendar years after your last contribution and if she does withdraw before the 2 calendar years, it'll be considered as your income and you will taxed at it accordingly.

Contributions limits for a spousal RRSP are based on the contributor's limits, not the spouse's.

[duner]

Contributions limits for a spousal RRSP are based on the contributor's limits, not the spouse's.

This will be troublesome as I will have already maxed out my own contribution limit.

Yes you do get a tax break just as if you were to contribute into your own RRSP, but if your wife doesn't work outside of home then she might not have too much contribution room because you can only contribute 18% of your spouse's income for the year, you might want to check her last year's Notice of Assessment to see what her limit was then and keep that in mind before you start putting money into her RRSP.

My wife did work for many years, so has stored up quite a high contribution limit. There's just no need to for her to work now that I'm making more money. If I just give her money for her RRSP, at least I won't be taxed on the investment income she makes off of it though.

Thanks for the tips. I'll definitely consult my accountant when we meet up. It's only twice a year. Once in the middle as a kind of "check" to make sure everythings in place for tax season, etc. If there are any concerns, then we can fix them before tax season. Then of course for taxes.

[MoreMiles]

You can open a corporation and make her a shareholder to receive dividends. You can also pay her as an employee to keep your paperwork and office management, etc.

[nobody1234]

You can open a corporation and make her a shareholder to receive dividends. You can also pay her as an employee to keep your paperwork and office management, etc.

You could pay her for sex.

[ghostryder]

You can open a corporation and make her a shareholder to receive dividends.

May or may not be an option depending on the OP's line of work.

You can also pay her as an employee to keep your paperwork and office management, etc.

Only if you pay her a legitimate wage for actual work.

You could pay her for sex.

He's married, he already is.

[tng11]

You could pay her for sex.

But wouldn't that be counted in his wife's income? Therefore it would be taxable.

[Johnny Walker]

You could pay her for sex.

Of course, she would need to issue an invoice so that there is a paper trail in case the CRA audits you or her. In addition, if she is paid over 30K, she would have to register for GST, charge and extra 5% and remit it to Ottawa