I am planning to move to Canada in 2021 with my wife (Canadian citizen).
As far as I understand, having a joint account with rights to ownership in Canada has the advantage that if one of the owners die then the account automatically goes to the owner. However, the disadvantage is the tax complexity with the proportionate tax reporting as outlined here https://ca.rbcwealthmanagement.com/dele ... 17/content
Is this correct? Am I missing something?
advantages and disadvantages of joint financial account in Canada
Moderator: Mark T Serbinski CA CPA
Re: advantages and disadvantages of joint financial account in Canada
For bank accounts, I wouldn't exactly call the division of interest "complex". CRA is not going to make a big deal how you divvy up the interest.
Be careful though about your assumption that ownership implies immediate accessibility, should one of you die. Most joint accounts are immediately frozen by the bank when one member dies, pending various bank procedures.
As to other financial accounts, given Canada's attribution rules, it would be best to have these accounts separate in my opinion. That would actually reduce complexity of reporting.
I would think that most Cdn couples have a joint account for day-to-day banking needs, and then each would have other bank and investment accounts in their own name. Any sheltered accounts would of course be in one name.
Be careful though about your assumption that ownership implies immediate accessibility, should one of you die. Most joint accounts are immediately frozen by the bank when one member dies, pending various bank procedures.
As to other financial accounts, given Canada's attribution rules, it would be best to have these accounts separate in my opinion. That would actually reduce complexity of reporting.
I would think that most Cdn couples have a joint account for day-to-day banking needs, and then each would have other bank and investment accounts in their own name. Any sheltered accounts would of course be in one name.
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Re: advantages and disadvantages of joint financial account in Canada
That is very helpful. At this point, I am planning on one joint "checking account" and separate savings, brokerage accounts and of course RRSPs.
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nirvana_1959
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Re: advantages and disadvantages of joint financial account in Canada
A little late. Perhaps others can benefit from it. My accountant advised me to make all accounts as joint (from estate planning perspective it's a good idea). However, each account is "owned" by only one of us. By "owned" I mean (a) puts money in and (b) reports income from the account.
Re: advantages and disadvantages of joint financial account in Canada
"My accountant advised me to make all accounts as joint (from estate planning perspective it's a good idea). However, each account is "owned" by only one of us. By "owned" I mean (a) puts money in and (b) reports income from the account."
That is very helpful, Nirvana. Thanks!
That is very helpful, Nirvana. Thanks!