Can a Canadian citizen living abroad make an RRSP contribution?

Gena Katz, a chartered accountant and principal with Ernst and Young, has the answer.

Gena Katz 22 January, 2004 | 2:00PM
Dear Expert:

I am a Canadian citizen currently living in the U.K., so my status is Canadian non-resident. I have rental property in Canada and therefore do file a tax return every year. As I will be returning to Canada for good in two years, I want to start building on the RRSP I currently have. The contribution annually will be in the region of $12,000. Is there any way I can resume contributing to my RRSP, even though I don't have any Canadian source of earned income?"

Expert Answer:

Unless you have unused RRSP contribution room from the period prior to becoming non-resident, you won't be able to make an RRSP contribution until the year after you have some earned income. Although rental income does form part of earned income for Canadian residents, for non-residents only Canadian employment income and Canadian business income go into the earned income calculation.

To find out how much an RRSP contribution may save you, try Morningstar's RRSP Calculator.

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Gena Katz

Gena Katz