What Happens to a Spousal RRSP After Separation in Ontario

A spousal RRSP is a retirement plan that one spouse pays into and the other spouse will eventually draw from. When the relationship ends, both people usually want to know the same things: whose plan is it, does it get divided, and will withdrawing money cause a tax problem for the person who put it in?

This article explains the general rules in Ontario, including the exceptions for separated spouses and common-law partners. Your own answer will depend on the plan, the dates and your agreement, so treat this as a map and not a substitute for advice.

How a spousal RRSP works

With a spousal RRSP, one spouse contributes and the other is the person the plan is set up for. The contributor claims the tax deduction, and the contribution reduces the contributor's own RRSP deduction limit. You can contribute to a spouse's RRSP until December of the year the spouse turns 71.

Because the deduction belongs to the contributor but the plan is set up for the other spouse, separation raises two questions: how the plan is treated when property is divided, and who is taxed when money comes out.

Is the spousal RRSP divided in equalization?

For married spouses, Ontario uses equalization. Each spouse values the property they own on the separation date, less debts and excluded property, then subtracts the net property they owned on the marriage date. The spouse with the larger net family property pays half the difference. A negative share counts as zero.

Some property is excluded, such as gifts or inheritances (other than the family home), life insurance proceeds received because someone died, personal injury money, and property excluded by agreement. Whether and how a particular RRSP is counted, and whether any tax on it is taken into account, depends on the facts and is worth confirming with a lawyer or accountant.

If you are common-law partners, the rules differ. Common-law couples are not legally required to split property acquired while living together, although they may recover contributions to the other's property, sometimes through court.

There is also a deadline. A court claim for an equalization payment must be started within six years of separation or two years after the divorce is final, whichever comes first.

The attribution rule and the separation exception

The attribution rule is meant to stop one spouse from getting the deduction while the other spouse withdraws the money at a lower tax rate. If the contributor paid into any spousal RRSP in the year of the withdrawal or the two preceding years, the withdrawal may be taxed to the contributor instead of the person who withdrew it. For 2025, that covers contributions made in 2023, 2024 and 2025. The window moves forward by a year each tax year. Form T2205 is used.

The exception matters for separated couples. The attribution rule does not apply when the contributor is living separate and apart from the spouse because of marriage breakdown. It also does not apply in the year the contributor dies or when either person is a non-resident.

Whether you count as living separate and apart because of marriage breakdown is a question of fact. Dates matter, so keep a clear record of when you separated.

Moving retirement savings and other property between you

On a marriage or common-law breakdown, RRSP property can be transferred tax-free to the spouse's or former spouse's RRSP or RRIF if you are living separate and apart and the transfer is made under a court order, judgment or written separation agreement. That means the paperwork matters. An informal withdrawal and handover will not get the same treatment.

Other property has its own tax rules. Capital property transferred to a spouse or common-law partner, or to a former spouse or partner in settlement of rights arising from the relationship, rolls over at adjusted cost base if both are resident in Canada. The transferor may elect out in their return.

Income attribution on property you gave your spouse stops while you live separate and apart because of the breakdown. Capital gains attribution on a later sale is stopped only if both of you file a joint election.

What to do next

• Write down your separation date and keep proof of when you began living separate and apart.
• Collect statements for every RRSP, including the spousal plan, and note who contributed and when.
• List contribution years so you can see whether the attribution window is relevant.
• Do not withdraw or transfer money before you know the tax result; the transfer rules depend on a court order, judgment or written separation agreement.
• Ask a lawyer how the plan fits into your property claim, and ask an accountant about the tax filing.

Frequently asked questions