Can I split capital gains with my spouse to reduce tax?

Canada's attribution rules significantly restrict the ability to split capital gains with a spouse by transferring property between them. If you give or sell property to your spouse at less than fair market value, any capital gains (and losses) subsequently realized on that property are "attributed" back to you and taxed in your hands, not your spouse's. The attribution rule continues to apply as long as you are spouses.

There is a limited exception: if you sell property to your spouse at fair market value and elect out of the spousal rollover, and your spouse pays the full fair market value using their own funds (not funds you lent to them at less than a reasonable interest rate), future gains on the property will be taxed in your spouse's hands. This requires the spouse to genuinely pay fair market value — a nominal or unpaid "purchase price" does not work.

Gifts and loans to adult children are subject to a related attribution rule for income earned on loaned funds, but capital gains earned by adult children on gifted property are generally not attributed back to the donor. This makes gifting to adult children (not minor children) a different planning consideration than gifting to a spouse.