The timing of withdrawals from a Spousal RRSP is an important consideration.
If the annuitant spouse withdraws monies from the spousal plan and the higher income spouse has contributed to the Spousal RRSP in the year of the withdrawal or either of the two preceding years, the withdrawal will be taxed in the higher income contributor’s hands, not the annuitant spouse’s hands.
If, however, the higher income earning spouse has not made a contribution to the spousal RRSP in the year of the withdrawal nor the two preceding years, then the withdrawal is taxed in the hands of the lower income spouse or spouse annuitant.
Note: The timing of contributions is an important consideration as a couple approaches retirement and withdrawals from the Spousal Plan form part of their retirement income.
It is worth noting that it is the date of the contribution to a Spousal RRSP that dictates the attribution rules, not when the contribution is claimed on the income tax return.