Complex attribution rules prevent spouses from simply splitting joint investment income equally between them. Joint investment income includes interest on joint bank accounts, investment income deposited into joint brokerage accounts, income from jointly owned mutual funds and jointly held rental real estate, as well as capital gains from the disposition of jointly owned investments.

The attribution rules require that joint investment income be allocated between spouses based on each individual's contribution of the investment funds. Spouses with joint investments should be prepared to show the Canada Revenue Agency the source of the investment funds in support of their allocation of the investment income. This requires both spouses to keep track of the source of the funds used to acquire the joint investments.

Certain opportunities may exist to split investment income between spouses while not being subject to the attribution rules discussed above.  Contact a Chartered Accountant to help you review your tax planning strategies to potentially take advantage of income splitting with your spouse.

Information for Tax Tips is provided as a public service by the Chartered Accountants of British Columbia.