Pension Income splitting
New rules permit the splitting of pension income. this is an election that you file at income tax time.
CPP Income splitting
The Canada Pension Plan has permitted the splitting of CPP income for many years, but application for this service must be made to directly to CPP.
Spousal RRSP
A spousal RRSP is one of the primary tools used to plan for future income splitting. It is and will continue to be useful particlularly in situations where spouses are not close in age. The basic principle of the spousal RRSP is that the high income earner can put money away in the name of the lower income earner and receive tax deductions in the name of the high income earner.
Spousal RRSP plans are subject to attribution rules to prevent undue abuse. Withdrawals from a spousal plan will attribute back and be taxable to the donor up to the amount of total deposits made to a plan in the prior 3 year period.
