After your marriage or common-law partnership comes to an end there are many financial matters to take care of. One of those may be transferring part of one person’s registered retirement or savings account to the other person’s account. Both funds are assets that are owned by both people, so they must be divided equally between them. In this case, you may have a court order or separation agreement that details exactly how much money you need to transfer. You can complete this transfer with a T2220 Transfer Form.
What is a T2220 Transfer Form Used for?
The T2220 Transfer Form is used to transfer money from one person’s unmatured retirement fund to their former spouse or former common-law partner’s retirement fund.
You can take from any of these accounts:
- Registered Retirement Savings Plan (RRSP)
- Registered Retirement Income Fund (RRIF)
- Pooled Registered Pension Plan (PRPP)
- Specified Pension Plan (SPP)
The money can then only be deposited into the other former spouse’s account, and only RRSP, RRIF and SPP funds. You may not transfer into non-registered account of other kinds of registered accounts. The transfer must be made directly.
Additionally, the two people involved in the transfers must have been former spouses or common-law partners who are now living separate and apart.
How are RRSPs Divided in Divorce?
In Canada, RRSPs are divided equally in divorce, just like any other asset. Your RRSPs, RRIFs and SPPs are considered joint property, as are the accounts of your former spouse or common-law partner. However, that does not mean that you need to make any transfers if you can otherwise disperse the value of your registered accounts.
You’ll need financial help to estimate the value of all of the retirement accounts that need to be separated in the divorce. Then, you’ll need help determining the best way to divide the assets according to you and your former spouse or former common-law partner’s new circumstances.
Depending on the nature of your separation, you may be able to amicably agree to an amount or you may need to get a court order to separate your RRSPs and other registered accounts.
How to Fill Out a T2220
The person from whom money is being transferred should fill out the form. The person who is receiving the money should also receive a T4RIF, T4A or T4RSP once the transfer is completed.
The T2220 form will ask you for your personal information, information about the two accounts involved in the transfer, the amount you are to transfer and whether this is all of the accounts or not. You will also need to know the type, name, and fund number of the account you are transferring the money to. If you do not have this information you can request that your former spouse or common-law partner complete it.
If you have multiple registered accounts that you are transferring from then you need to complete separate T2220 forms for each one.
After the transfer is complete the person who is receiving the money should receive an informational slip about the transfer. Note that this transfer does not count as income.
How to Avoid Taxes on a T2220 Transfer
Transfers between you and your former partner’s retirement accounts can be made without a court order or a written separation agreement, but when they are, they may be subject to large taxes. However, if you have a court order or written separation agreement, the funds can be transferred without tax penalty. If you are splitting amicably, you can draft a written separation agreement to avoid taxes on this transfer.
However, if your former spouse or common-law partner should pass away before the actual transfer is made, the Canada Revenue Agency will add tax to the amount being transferred to your account.
Where to Get a T2220 Form as a PDF
You can get a PDF version of the T2220 from the Canada Revenue Agency’s (CRA) website.
You may need to get the form from the financial institution that holds the account money is being withdrawn from, as the institution may have their own version of the form. However, note that the CRA does not require you to reveal the court order or the conditions of the transfer to the financial institutions involved.