Spousal RRSP After Separation: Who Keeps the Money in Ontario

A spousal RRSP is an account owned by one spouse but funded by the other. When a relationship ends, it is natural to ask whose money it is, how it is counted and whether moving it will trigger tax.

The answers sit in two places: Ontario's property rules and the federal Income Tax Act. This article explains how they generally fit together. Your own numbers matter a great deal, so a lawyer and an accountant should confirm the details.

How a spousal RRSP works

One spouse or common-law partner contributes to an RRSP in the other's name. The contributor claims the 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.

The contributor is the person who claims the deduction for the contribution. That is why separation raises questions: the person who paid in and the person who holds the plan are different people.

How it fits into equalization

For married spouses, each person values property owned on the separation date, less debts and excluded property, then subtracts net property owned on the marriage date. The spouse with the larger net family property pays half the difference as the equalization payment, and a negative share counts as zero.

Some property is not shared, 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 an RRSP is adjusted for the tax that will eventually be payable on it depends on the facts, so ask a lawyer or accountant.

Common-law partners are not legally required to split property acquired while living together, although they may recover contributions to the other's property, sometimes through court. Time also matters: 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 three-year attribution rule and its exception

If the contributor paid into any spousal RRSP in the year of withdrawal or the two preceding years, the withdrawal may be taxed to the contributor instead of the account holder. For 2025, this covers contributions made in 2023, 2024 and 2025, and Form T2205 is used. That window moves forward each tax year.

There is an important exception. This attribution 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.

Moving RRSP money without tax

On marriage or common-law breakdown, RRSP property can be transferred tax-free to the spouse's or former spouse's RRSP or RRIF. The two of you must be living separate and apart, and the transfer must be made under a court order, judgment or written separation agreement.

Other property follows different 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, and the transferor may elect out in their return. Income attribution stops while spouses live separate and apart because of breakdown, but capital gains attribution on a later sale is stopped only if both file a joint election.

What to do next

• Collect recent statements for every RRSP, including who contributed and who is the account holder.
• Note your separation date, since many of the rules turn on it.
• Ask whether the transfer is written into your separation agreement or order before any money moves.
• Speak with an accountant about the tax effect and a lawyer about how the RRSP counts in equalization.
• Avoid withdrawing from any plan until you know the tax result.

Frequently asked questions