Client is U.S. citizen who lives in the states and will never live in Canada again. For convenience reasons, she wants to combine her RRSP and her spousal RRSP.
When they hit 70, they will take minimum RRIF distributions and pay flat rate of tax due from non-residents on RRIf distributions.
I don't see any negative tax implications on combining the RRSP & Spousal RRSP so she has one less account to handle.
Am I missing anything?
Thanks,
Combining RRSP & Spousal RRSP
Moderator: Mark T Serbinski CA CPA
Since combining a spousal and a personal RRSP taints the regular plan, you want to ensure that it's been at least 3 years since the other spouse contributed before RRIF distributions begin.
Also, I remember reading that a spousal RRSP converted to a RRIF is only allowed minimum distributions in the first 3 years. This wouldn't be a problem given the scenario, but she should know this in case she might want more money in those first 3 years.
Also, I remember reading that a spousal RRSP converted to a RRIF is only allowed minimum distributions in the first 3 years. This wouldn't be a problem given the scenario, but she should know this in case she might want more money in those first 3 years.