Two people who each earn $100,000 per year generally pay less combined income tax than an individual making $200,000 per year. This creates a strong incentive for couples to find ways to balance their incomes. One way to achieve income splitting is to try to shift non-registered investments from a higher-earning spouse to a lower-earning spouse. The TFSA rules seem to permit a strategy for shifting assets between spouses. Let’s illustrate this with an example. Alice is a doctor making $200,000 per year. He husband Ted watches the children and makes no income. Over the years Alice has maximized her RRSP and TFSA contributions and in addition has built up significant non-registered investments that produce income. Unfortunately, this income is highly taxed in her hands. If the non-registered investments belonged to Ted, the couple would pay less income tax each year. However, if Alice simply gives the assets to Ted, CRA attribution rules say that the income derived from the i...