Can I transfer money to my spouse's RRSP without penalty as part of a divorce settlement?

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

Gena Katz 10 March, 2003 | 2:00PM
Dear Expert:

I am in a divorce negotiation and I would like to transfer $16,000 currently in a spousal RRSP in my name to my husband's RRSP? Can this be done without penalty?

Expert Answer:

It is possible to transfer property from an un-matured RRSP (assuming another person has not been named as the plan's beneficiary) to a spouse's or common-law partner's plan without immediate tax consequence, but only in specific circumstances. In order to be eligible for such a "rollover", the transferor and her/his spouse or common-law partner or former spouse or common-law partner must be living separate and apart. Moreover, this transfer must be made under a court order or a written separation agreement, relating to a division of property in settlement of rights arising out of marital (or common-law) breakdown.

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Gena Katz

Gena Katz