Financial Planning Body of Knowledge
The Financial Planning Body of Knowledge (FP-BoK) describes knowledge expected of CFP® professionals
and FPSC Level 1® Certificants in Financial Planning.
Income Splitting with Students
KNOWLEDGE EXPECTED OF: Both CFP® Professionals and FPSC Level 1® Certificants
- Explain methods of how income splitting may be accomplished with a student, such as:
- Contributing to a Registered Education Savings Plan for which the student is a beneficiary
- Explain the estimated income tax impact for each income splitting method.
- Estimate the income tax impact for each income splitting method.
- Explain how each of the factors may impact the suitability of splitting income with students, such as:
- Marginal tax rate differential between the taxpayer and student
- In current year
- In future years when withdrawals are made, if applicable
- Impact on net taxes paid by the taxpayer and student
- Income attribution rules
- Potential impact on government benefits
- Potential impact on government sponsored savings plans, including grants and bonds
- Potential impact on ownership of assets
- Potential impact on creditor protection of assets
- Potential for CRA to deem method unreasonable and used only for tax avoidance under General Anti-Avoidance Rules (GAAR)
- Cost and fees associated with implementing the strategy to split income
- Evaluate how each of the factors may impact the suitability of splitting income with students.
Glossary of Verbs (mouse over to see definition)
Read more about the Taxonomy used in the FP-BoK
To state exactly the meaning of
To be aware of / to recognize and correctly name / to locate an appropriate resource
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
To note the similarities and differences between two or more things
To determine an approximate value for
To find the value using mathematics
To change from one form or purpose to another
To reach a conclusion or make a judgement through careful study
To give the meaning of / to construe or understand / to translate orally