Posted on: 09-02-08 14:44:46
hi,
I know that for the Home buyers Plan, you can withdraw 20000$ per person from your RRSP account for ur first home in canada.
my situation is this. My husband has already contributed the 20000$ in this RRSp. now if this year for 2007 if he contributes in a spousal RRSP about 10000$, will he be able to withdraw that 10000$ for our HBP after 91 days without having to pay the withholding tax.
Now for the spousal RRSP, if we withdraw the money within 2 yrs of contribution, that is considered the contributing spouses income, and aftr that it is considered the annuitant's income. Now does this rule apply if you are withdrawing the money under the HBP ???
I tried to ask this question at the various banks, and at 4 diff branches I got diff, answers. 2 of them said that yes you can withdraw for HBP and other 2 said No..u cant withdraw for HBP. I checked the govt. website also, but in no case it is speciafically written about this situation.
Can someone help??
Minu.
Quote:
Originally posted by mrunal8675
hi,
I know that for the Home buyers Plan, you can withdraw 20000$ per person from your RRSP account for ur first home in canada.
my situation is this. My husband has already contributed the 20000$ in this RRSp. now if this year for 2007 if he contributes in a spousal RRSP about 10000$, will he be able to withdraw that 10000$ for our HBP after 91 days without having to pay the withholding tax.
Now for the spousal RRSP, if we withdraw the money within 2 yrs of contribution, that is considered the contributing spouses income, and aftr that it is considered the annuitant's income. Now does this rule apply if you are withdrawing the money under the HBP ???
I tried to ask this question at the various banks, and at 4 diff branches I got diff, answers. 2 of them said that yes you can withdraw for HBP and other 2 said No..u cant withdraw for HBP. I checked the govt. website also, but in no case it is speciafically written about this situation.
Can someone help??
Minu.
Hi Minu,
The answer to your first question is YES.
Since you would be the owner and annuitant of your husband's spousal RRSP, only you ( not your husband) can withdraw the amount under HBP (or otherwise) in your name. Your husband is only the contributor and would get tax benefits for the taxation year 2007 if he contributes till 29th Feb 2008.
Now your second question.
The 3 year rule does not apply to withdrawal under HBP. Hence, if you withdraw from your husband's spousal RRSP under HBP in your name, and your HBP repayment is lower than required, then the amount would be added to your income.
For more clarification follow this http://www.dsf-dfs.com/en-CA/Prtclrs/CnsltCntrFrmtn/CntrRrRtrt/REER/RgmAccssnPrprt.htm
or contact me.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Absolutely correct, Pramod Bhai.
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Folks ,
Regarding withdrawal of RRSP by spouse after 2 calendar years , I have a doubt :
Can the RRSP be withdrawn after 2 calendar years if following the investment 2 years ago , some other spousal RRSP s have also been made ?
In other words - is it 2 years flat or 2 years after the last spousal RRSP .
Say I contributed towards spousal RRSP in 2008 ... and then again another sum in 2009 but to a different spousal RRSP account -- When can the spouse withdraw the 2008 RRSP money without adding to my tax liabiity - 2011 or 2012 ?
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Fido.
Quote:
Originally posted by Fido
Folks ,
Regarding withdrawal of RRSP by spouse after 2 calendar years , I have a doubt :
Can the RRSP be withdrawn after 2 calendar years if following the investment 2 years ago , some other spousal RRSP s have also been made ?
In other words - is it 2 years flat or 2 years after the last spousal RRSP .
Say I contributed towards spousal RRSP in 2008 ... and then again another sum in 2009 but to a different spousal RRSP account -- When can the spouse withdraw the 2008 RRSP money without adding to my tax liabiity - 2011 or 2012 ?
AFAIK, It is 3rd Calendar year from the last contribution for normal withdrawals (not under HBP) to avoid attribution rule. I will try to find proper link from CRA's website and post it here later.
So, the answer for you would be year 2012. If you withdraw any amount before year 2012 it would be attributed back to you. May be this http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/wthdrwls/xmpl-eng.html can make it more clear.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Thank You much Pramod jee - as always , you have been very helpful.
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Fido.
