Ask a Planner

By Jason Heath, CFP on July 7, 2025
Estimated reading time: 6 minutes

By Jason Heath, CFP on July 7, 2025
Estimated reading time: 6 minutes

A MoneySense reader wants to give money to his spouse to invest. Can he avoid Canada’s income attribution rules?

You wrote about money that is gifted to a spouse. If that money is used for investing, then the interest may be attributed back to the spouse giving the cash. Did I get that correct? If so, then is there any way to give your spouse money and whatever they do with it is their responsibility?

–Jim

In some cases, Jim, you can give your spouse money to invest with no adverse tax implications. It is important to be aware of the income attribution rules when giving money to non-arm’s-length parties like family members. Let’s look at the spousal attribution rules and different investing scenarios.

When you give money to your spouse to invest, the resulting income may be attributed—meaning taxed back—to the spouse who gave the money. For example:

It is the source of the funds that determines who they belong to for tax purposes. So, in a simple example, if one spouse works and the other does not, the employed spouse cannot simply give the stay-at-home spouse money to invest without the income being taxed back to them.

The same sourcing logic could apply to an inheritance. When a parent dies, they generally leave an inheritance to their child, not the child and the child’s spouse. So, the money belongs to the beneficiary for tax purposes, even if a couple then invests the inheritance in a joint account.

Even if an account is subject to attribution, you could take the income earned and invest it in a second account. If you can distinguish this income........

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