Ontario RRSP, TFSA & RESP Division Tool

RRSPs are included in Ontario's net family property calculation under the Family Law Act, with only the growth during marriage subject to equalization. A notional tax rate of 20-40% is typically applied to reflect after-tax value—a $100,000 RRSP at a 30% notional rate equals $70,000 in true value. Form T2220 allows direct tax-free transfer to your ex-spouse's RRSP without requiring their contribution room.

No—RRSPs and TFSAs have different after-tax values despite identical balances. A TFSA is included at full face value because withdrawals are tax-free, while RRSPs require a notional tax deduction of 20-40% since withdrawals are taxed as income. A $100,000 RRSP may only equal $60,000-$70,000 after tax, meaning trading a $100,000 TFSA for a $100,000 RRSP would shortchange one spouse.

Yes—section 146(16) of the Income Tax Act permits tax-free RRSP transfers on marriage breakdown using Form T2220. The transfer must occur under a written separation agreement or court order and be made directly between registered accounts. The recipient spouse does not need available contribution room, and no withholding tax applies when the form is properly completed.

RESPs are trusts for children's education rather than traditional marital property, but they must be addressed in your separation agreement. Options include continuing as joint subscribers, splitting the RESP equally between separate accounts, or having one parent assume full control. Government grants like the CESG follow the funds and continue accruing if the RESP remains active.

If an RESP is collapsed without the beneficiary attending post-secondary education, all Canada Education Savings Grant funds must be repaid to the federal government. The CESG provides 20% matching up to $500 annually, with a lifetime maximum of $7,200 per child. To preserve these grants during divorce, maintain the RESP for the child's education rather than withdrawing funds as accumulated income.

Spousal RRSPs are included in net family property and can be divided using Form T2220 like regular RRSPs. However, the 3-year attribution rule applies if the contributor made deposits within the calendar year of separation or the two preceding years—withdrawals during this period are taxed to the contributor. Once separated, no further spousal contributions can be made and the spousal designation must be removed.

A LIRA (Locked-In Retirement Account) holds pension funds that cannot be withdrawn early and is governed by Ontario's Pension Benefits Act. Division is limited to a maximum of 50% of assets transferred to the non-member spouse's own LIRA or Life Income Fund. The matrimonial portion equals the LIRA value at separation minus the value at marriage, and a family law directive or court order is required to complete the transfer.

Ontario family law practitioners typically apply notional tax rates between 20% and 40%, with 30% being most common for middle-income earners. Ontario's combined federal-provincial marginal tax rates range from 20.05% to 53.53% depending on income. The appropriate rate depends on when the RRSP holder will likely withdraw funds and their expected tax bracket at retirement.