Annuitants taint their RRSP share investments as non-excluded property if they sit on the board

Shares are a prohibited investment for an RRSP (or RRIF) if the annuitant has a "significant interest" in, or does not deal at arm’s length with, the corporation, and the shares are not "excluded property." Shares which otherwise would be excluded property will be tainted if the annuitant has "the right to cast at least 10% of the votes…that could be cast regarding the governance of the [corporation]."

CRA considers that this test will be violated if the annuitant is a member of the board of directors (assuming the board has under 11 directors) as he or she would be entitled to cast at least 10% of the votes on a board vote. This also applies to a director/TFSA holder.

Neal Armstrong. Summary of 26 November 2014 T.I. 2014-0545041E5 under s. 207.01(1) – excluded property.