CRA Tax Alert

The CRA is warning taxpayers about numerous schemes making the rounds regarding registered retirement savings plans (RRSP) and registered retirement income funds (RRIF) withdrawals.  The tax alert warns that these schemes can have a drastic effect on your retirement savings and the possibility of reassessments on your tax returns.  In fact, CRA has reassessed over 5,000 taxpayers who engaged in these schemes, producing an additional $250 million in taxable income from the reassessments. 

 

Schemes to be avoided may be presented as follows:

The people who are presenting these offers to taxpayers will usually direct them to purchase an investment, such as shares in a company or participation units in a co-op, through a specified trustee. 

 

These promotional schemes can put your savings in a precarious position because in some cases the promoter will walk away with the funds.  No matter the sales pitch, the full amount of any withdrawals or an ineligible investment will be included in the taxpayer's income for the year in which it was made, and may be subject to interest and penalties.

 

We would advise anyone considering such an investment to contact their tax or accounting professional to seek advice before investing.

 

To view the complete news release issued by CRA, click here.