Withdrawals from RRSP

RRSPs are for saving money for your retirement but some times you may have to take money for some urgent needs. But when you redeem there will be withholding taxes taken at source before you receive the money. If you withdraw money under Home Buyers Plan or Life Long Learning Plan, there will not be taxes withheld for those.

For example, if you (Ontario resident) redeem $4,500.00 from the plan, you will receive $4,050.00 and the financial institution will remit CRA the balance $450.00 as taxes (10% tax see below. At the end of the year, you will include the $4,500 in your income and $450.00 as tax paid. Based on your other income you may get a refund or you will pay more taxes for the withdrawal when you file income tax return for that year.

Amount Withdrawn	Withholding Tax Rate (Except Quebec)	Quebec Resident Federal	Quebec Resident Provincial	Total Quebec Withholding Tax
$0 - $5,000	10%	5%	16%	21%
$5,001 - $15,000	20%	10%	16%	26%
$15,001 and over	30%	15%	16%	31%

Other scenario is what happens when you move out of Canada and become non resident. Generally there will be 25% withholding taxes but if there is a tax treaty with the other country then the tax rate may be lower.

Wills - Ontario

In Ontario you can either do a conventional will or holographic will

Conventional Wills:
Also known as the English Law Will.  It is the most common form of Will and is recognized by all the provinces (in Ontario under the Succession Law Reform Act).

The following requirements apply to the Conventional Will:

• It must be signed by the testator (i.e. person who makes the will) in the presence of two witnesses. Witnesses cannot be the beneficiaries or spouses of the beneficiaries

• The testator must be mentally capable and cannot be a minor,

Holograph Wills:

A holograph Will is a handwritten will. The entire Will must be in the handwriting of the testator and signed by the testator. No witness is necessary. A typed Will with testator’s signature is not accepted as a legal holograph Will.

Holograph Wills are valid in Ontario. It is not recommended as it may create legal complications. But it is useful in emergency situation.

Interesting example of a holographic will:

On June 8, 1948 in Saskatchewan, Canada, a farmer named Cecil George Harris who had become trapped under his own tractor carved a will into the tractor's fender. It read "In case I die in this mess I leave all to the wife. Cecil Geo. Harris" The fender was probated and stood as his will. The fender is currently on display at the University of Saskatchewan College of Law law library