Withdrawal from personal RSP under LLP and contributing towards spousal RSP
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Posted on: 20-01-15 10:44:32
Jigz787: Please have some respect to those who tries to spend some time and answer your questions (whether it is relevant or not). FH will not get a fortune if he increases his number of posts. If any ones' answers doesn't make sense to you ... you can always ignore and can look for an answer / info you exactly looking for. That should be the spirit of our forum. I hope you appreciate.
Quote:
Originally posted by Gurram
Jigz787: Please have some respect to those who tries to spend some time and answer your questions (whether it is relevant or not). FH will not get a fortune if he increases his number of posts. If any ones' answers doesn't make sense to you ... you can always ignore and can look for an answer / info you exactly looking for. That should be the spirit of our forum. I hope you appreciate.
WOW
THANKS
Thank you. No offence jigz787. 
not trying to increase my posts
FH how come you failed to read OP mind . Next time please make sure that your replies are well tailored to requester need and it should HELP .
Sorry but I can't provide you the meter that can gauge effectiveness .
Most of us don't value your time and efforts spent on research to help others without personal gains .
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Growing Old Is Mandatory ..Growing UP is Optional
One thing I knew was, that you will be dropping in here and asking me that question. How was that for reading YOUR MIND.
YES, AshwaniG, my joy and pleasure is working on an assignment each and every day and on some days I do my own research for an article that bugs the day light out of me. One such name is Baghdadi.
I tried to read a few minds, NOT ALL of them. But the one in question was scary. See the figure above 763. You will know what I mean. Also, when I post just once to this query here and they assign a number say, 1142, the number does not increase after your first post. WOW.
I can hide from you, even during the snowy days, but you seem to know where I am hiding. You read even locations now. That is uncanny. You caught me this time. Next time I will be invisible.
The letter for POA and its cost is about 25 buckaroos. Also the Cost of a will will be about 100. You should carry with you the title to your property and any insurance policy and Bank and RRSP accounts PLUS other financial materials too. That is just for the will. For a living will discuss it between your spouse and the family, first. That is a little sensitive stuff. I am writing this as the computer at the library only allows me a few minutes extra.
Take care.
FH>
Quote:
Originally posted by jigz787
If I am eligible to withdraw funds from my personal RSP account using the LLP (Lifelong Learning plan) option (because me or my spouse is a full-time student), can I withdraw from my own RSP account and use the funds to contribute into spousal RSP account to take tax deduction advantage for the current tax year? The money I withdraw from LLP needs to be re-paid in 10 years starting after 4 years from the withdrawal date.
Plus I can also take those money out from spousal RSP at low tax rates in the future when the spouse is not working (on maternity/paternity leave)
Does it make sense ?
Is it a good idea ? Or do you see any problem ?
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/llp-reep/menu-eng.html
Thank you for your time in advance.
Hi Jigz787,
From your post it is clear that you have read extensively from CRAs website and understood the concept and just want a validation for your observation.
The short answer to your question is that you can do it. Whether or not it would make sense for you depends on your circumstances and the marginal tax rate difference in your and your spouses income. And of course, if your spouse is making less income 3 years down the road, your spouse can withdraw money from his/her spousal RRSP and pay less taxes.
There is NO problem as far as CRA is concerned. Depending on your situation and your available RRSP contribution room, taking a RRSP loan now may turn out to be a better way of increasing net worth instead of taking money out from the RRSP and losing out on the tax sheltered growth.
You should contact a financial planner and discuss your situation and he/she would be able to understand and guide you accordingly.
Good luck.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Pramod ji,
Thank you for your valuable answer. LLP option is available to me for a limited time only so I think I have decided to proceed ahead with the LLP option for now and use the RSP loan option in later years when my income is in even higher tax rate.
