What is a valid technique for income splitting?

Contributing to a spousal RRSP in your spouse or common-law partner's name is a valid technique for income splitting because it allows higher-income earners to effectively reduce their taxable income while contributing to their partner's retirement savings. When one partner contributes to a spousal RRSP, they can claim the tax deduction for the contribution, which lowers their total income for tax purposes. This can be particularly beneficial when there is a significant income disparity between the partners, as it helps shift some of the income to the lower-income spouse, who will likely be taxed at a lower rate upon withdrawal during retirement.

This approach not only aids in tax planning but also ensures that both partners are saving for retirement, strengthening their financial future together. It effectively utilizes the tax advantages of the RRSP while aligning with contribution limits and rules set by the Canada Revenue Agency.

In contrast, the other options may not provide the structured benefits that spousal RRSP contributions do for income splitting or might not align with the guidelines provided by tax law.