Attribution Rules for Couples moving to Canada

[charlesrei]

As I understand, Canadian couples cannot just give income producing assets to each other in the hopes of moving the liability to the lower tax rate spouse, because the income will be attributed back to the spouse who gave the asset.

In my case, my wife and I are US Cit/Res and she is also a Can Cit. I have given her $$'s that she has invested in stocks in her own account. When we move to Canada will those attribution rules still apply even though the gifts of income producing property were given, 'pre-move' to Canada?

[nelsona]

If you were living in Canada the answer would be clear-cut: you would pay tax on income that that money earned. There are some exclusions to this.

Once you leave Canada, the answer is not so clear-cut, in my opinion, as there is no way for CRA to determine the source of such funds. Add to the mix that when your and she return to Canada, there are the deemed acquisition rules which state that you both sell and buy back all your assets on the day you return, and I would have a hrd time being convinced that money you give to your wife today in US, should somehow be taxed in your hands. There is wording in the law about when the transferor is non-resident, that would seem to indicate that the attribution rules WOULD apply when you return, but I take those with a grain of salt.