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Carrying Charges Spousal Allocation

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For joint investments, if the lower income earner spouse claims all the T3/T5 interest/investment income, can the carrying charges be claimed by the higher income spouse?  In other words, one spouse claims all joint investment income, the other spouse claims all joint carrying charges.  Thank you.

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What the CRA says is that income/gains and carrying charges from joint accounts are allocated in proportion to a persons investment into the account. Say you supplied 40% of the funds and your spouse 60%, then everything is allocated on the 40-60 split. Having the lower income account holder claim all the income will get you into assessment trouble.

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Hello Cath,

You cannot simply split or optimize  a capital gain / dividends or interest  50/50 with your spouse (or others).  It is pre-defined as per the account set up with the financial institution.

This is because of the Attribution Rules, tax rules which have been especially created to limit income splitting (shifting income from a family member with a higher income to a family member with a lower income to reduce the overall tax a family has to pay).


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