Subsection 207.01(1) - Definitions
Advantage
Administrative Policy
20 August 2018 External T.I. 2018-0739761E5 - TFSA contributions
CRA indicated that each of the following payments made to a TFSA would not, in and of itself, constitute an advantage:
- The TFSA holder uses a...
May 2013 ICAA Roundtable, Q. 10 (reported in April 2014 Member Advisory)
What criteria apply in determining whether a transaction or event or a series of transactions or events involving a TFSA would not have occurred...
28 May 2014 External T.I. 2013-0486111E5 F - RRSP, prohibited investment
The shares of an RRSP, which were prohibited investments held by it on 23 March 2011 and for which it made the transitional benefit election in s....
6 June 2013 External T.I. 2012-0451801E5 F - deemed dividend, advantage
An RRSP which holds shares which became a prohibited investment on March 22, 2011, and which subsequently did not appreciate in value,...
ITTN No. 44 under "Key Employee Tax-Free Savings Account," 14 April 2011
After confirming the proposition posed that "where common shares of a company are issued to a tax-free savings account (TFSA) of a key employee as...
Articles
Maureen De Lisser, Janna Krieger, "Registered Savings Plans: Investing Without Penalty", Canadian Tax Journal, (2013) 61:3, 769-96.
Illustration of value shift from RRSP to TFSA (pp. 784-5)
The following example illustrates a swap transaction and an RRSP strip that these rules...
Paragraph (a)
Administrative Policy
S3-F10-C3 - Advantages – RRSPs, RESPs, RRIFs, RDSPs, FHSAs and TFSAs
3.6 “Where a benefit or debt is connected in any way with the existence of a plan, it is considered to be conditional on the existence of...
1 June 2016 External T.I. 2015-0601211E5 - Mortgage loan from RRSP to make a shareholder loan
An individual, who is an RRSP annuitant, borrows the “Mortgage Loan” from the RRSP, with a principal residence mortgage granted in favour of...
27 January 2014 External T.I. 2013-0504191E5 F - RRSP, qualified investment
An RRSP annuitant uses, for no consideration, property of a corporation of which the RRSP holds shares. Is this an advantage? CRA responded...
Subparagraph (a)(i)
Subparagraph (a)(ii)
Administrative Policy
S3-F10-C3 - Advantages – RRSPs, RESPs, RRIFs, RDSPs, FHSAs and TFSAs
3.9 An RRSP annuitant providing a letter of direction to collapse the plan and remit the proceeds to the lender on default would not render...
Subparagraph (a)(v)
Administrative Policy
2023 Ruling 2023-0979811R3 - ATR - Advantage - FHSA - higher interest rate
Background
BCo is a Schedule II Canadian chartered bank, B Sub is a BCo Canadian subsidiary which is registered in all provinces as a mutual fund...
3 April 2020 External T.I. 2019-0830101E5 - “Advantage”: promotional incentive exception
Q.1 and Q.2
S. (a)(v) of the advantage definition, as paraphrased by CRA in Folio S3-F10-C3, excludes “a promotional incentive under a program...
S3-F10-C3 - Advantages – RRSPs, RESPs, RRIFs, RDSPs, FHSAs and TFSAs
3.12 Fee waivers, preferential pricing, bonus interest and other promotional incentives offered by financial institutions typically satisfy one or...
Paragraph (b)
Administrative Policy
S3-F10-C1 - Qualified Investments – RRSPs, RESPs, RRIFs, RDSPs, FHSAs and TFSAs
Advantage tax
1.44 The advantage tax in section 207.05 could apply if an RRSP, RRIF or TFSA trust were to engage in certain option transactions....
7 November 2012 External T.I. 2012-0437821E5 F - Registered Plan - Advantage
Would the transfer of an individual’s shares of a credit union to the individual’s RRIF, RRSP or TFSA ("registered plan") comes within the...
14 February 2012 External T.I. 2011-0416621E5 F - REER, swap
Respecting a proposed swap of a savings bond held in an RRSP and a savings bond held in a non-registered account, before concluding that it was...
Subparagraph (b)(i)
Cases
Louie v. Canada, 2019 FCA 255
From May 15 to October 17, 2009, the taxpayer directed 71 “swaps” under which TSX-listed shares were transferred between her self-directed...
See Also
Louie v. The Queen, 2018 TCC 225, rev'd in part on "advantage" issue (for subsequent years) 2019 FCA 255
From May 15 to October 17, 2009, the taxpayer directed 71 “swaps” under which TSX-listed shares were transferred between her self-directed...
Administrative Policy
27 November 2018 CTF Roundtable Q. 12, 2018-0785021C6 - Investment management fees
CRA stated:
The Department of Finance Canada advised us earlier this year that they will be reviewing the issue from a tax policy perspective. As...
28 September 2018 External T.I. 2018-0779261E5 - Investment management fees
In 29 November 2016 CTF Roundtable Q. 5, 2016-0670801C6, CRA indicated that it now considered the payment of fees for investment management of an...
S3-F10-C3 - Advantages – RRSPs, RESPs, RRIFs, RDSPs, FHSAs and TFSAs
3.22 Example 10 (bid/ask plan strip)
Two unrelated individuals effectively transfer all the value in their RRSP to their TFSA by having their TFSA...
15 September 2017 External T.I. 2017-0722391E5 - Investment management fees
In 29 November 2016 CTF Roundtable Q. 5, 2016-0670801C6, CRA indicated that the payment of fees for investment management of an RRSP, RRIF or TFSA...
29 November 2016 CTF Roundtable Q. 5, 2016-0670801C6 - Investment management fees
CRA considers that the payment of fees for investment management of an RRSP, RRIF or TFSA by the plan annuitant or holder typically will be...
28 May 2015 External T.I. 2015-0574481E5 - Advantage tax and employee-owned securities
Have the views expressed in 2009-0320311I7 and 2009-0323391R3 changed in light of the amendment to s. (b)(i) of the definition of "advantage" that...
27 May 2009 Internal T.I. 2009-0320311I7 F - CELI - Notion d'avantage
The sole shareholder (Mr. X) of Opco engages in a freeze transaction as a result of which he holds all the preferred shares and 95% of the common...
Finance
26 August 2019 Comfort Letter - “Advantage”: Exclusion for Investment Management Fees
[If] investment management fees of registered plans … are paid directly by the holder/annuitant using funds outside of the plan, the resulting...
Articles
Tyler Berg, "Registered Plan Taxes: Recent Experiences", Canadian Tax Focus, Vol. 13, No. 1, February 2023, p. 3
Imposition of advantage tax where employees subscribe for post-freeze common shares (p. 4)
- 2009-0320311I7 considered that where, following a...
Subparagraph (b)(ii)
Administrative Policy
S3-F10-C3 - Advantages – RRSPs, RESPs, RRIFs, RDSPs, FHSAs and TFSAs
Example 7 (performance prefs)
Private company employees whose plans are issued non-voting prefs that pay dividends well in excess of the...
Subparagraph (b)(iii)
Administrative Policy
S3-F10-C3 - Advantages – RRSPs, RESPs, RRIFs, RDSPs, FHSAs and TFSAs
Any increase in value traceable to plan property acquired under a swap transaction is subject to advantage tax
3.24 A swap transaction is...
Paragraph (c)
Administrative Policy
17 April 2013 External T.I. 2012-0457011E5 F - Coop Shares in RRSP and Prohibited Invest. Rules
The correspondent expressed concern that although the new rules effectively required an RRSP holding shares of a cooperative to dispose of some of...
Deliberate Over-Contribution
Administrative Policy
14 July 2020 External T.I. 2020-0843071E5 - TFSA - Deliberate Over-contributions
In response to an inquiry as to the consequences to an individual who intentionally makes a TFSA contribution in excess of the available...
Excess TFSA Amount
Cases
Ossai v. Canada (Attorney General), 2023 FC 313
Although the facts are more intricate, they essentially involved the taxpayer, in early 2021, promptly withdrawing $29,000 from his TFSA when he...
Excluded Property
Paragraph (c)
Administrative Policy
17 April 2013 External T.I. 2012-0457011E5 F - Coop Shares in RRSP and Prohibited Invest. Rules
In the course of a general discussion of the application of the prohibited investment rules to an RRSP that held shares of a cooperative on March...
S3-F10-C2 - Prohibited Investments – RRSPs, RESPs, RRIFs, RDSPs, FHSAs and TFSAs
Meaning of "regarding the governance"
2.18 ... One of the conditions [in "excluded property" - (c)(iii)] sets limits regarding the governance of...
26 November 2014 External T.I. 2014-0545041E5 - Registered plans - Excluded property
The annuitant of an RRSP or RRIF or the holder of a TFSA owns 2% of the shares (being common shares only) of a corporation and together with the...
Exempt Contribution
Paragraph (b)
Administrative Policy
7 October 2020 APFF Financial Strategies and Instruments Roundtable Q. 5, 2020-0851601C6 F - TFSA Exempt Contribution - Spousal Trust
Mr. X’s TFSA formed part of the residue of his estate which, as such, was bequeathed by the terms of his will to a spousal trust, with a lump...
11 October 2019 APFF Financial Strategies and Instruments Roundtable Q. 7, 2019-0821701C6 F - TFSA Exempt Contribution - Survivor payment
Mr. X, who died on January 1, 2018, made a specific bequest of his TFSA to his surviving spouse (Ms. Y). However, the estate administration...
11 October 2019 APFF Financial Strategies and Instruments Roundtable Q. 6, 2019-0813451C6 F - TFSA - Bequest and disclaimer
Although Mr. X made a specific bequest of his TFSA to his adult daughter, she executed a written renunciation of the bequest (that CRA went on to...
11 October 2019 APFF Financial Strategies and Instruments Roundtable Q. 4, 2019-0813421C6 F - TFSA - Survivor Payment - Decrease in FMV
Situation 1
Mr. X made a specific bequest of his TFSA to his spouse (Ms. Y), which had declined in value from $100,000 to $90,000 between death...
6 June 2017 External T.I. 2015-0617331E5 F - TFSA - Exempt Contribution
Would the transfer of a TFSA to the deceased's spouse as a total or partial payment of a debt owed to the spouse under the partition of the family...
11 May 2017 External T.I. 2016-0679751E5 F - TFSA - Exempt Contribution
Would a transfer of funds from a deceased holder's TFSA to the holder's surviving spouse in order to pay a specific legacy satisfy para. (b) of...
Paragraph (c)
Administrative Policy
11 October 2019 APFF Financial Strategies and Instruments Roundtable Q. 5, 2019-0820901C6 F - TFSA Exempt Contribution - Timing of contribution
Mr. X, who died on January 1, 2018, had made a specific bequest of his TFSA (valued at death at $100,000) to his spouse (Ms. Y), who contributed...
Paragraph (d)
Subparagraph (d)(iii)
Administrative Policy
5 October 2012 Roundtable, 2012-0453171C6 F - TFSA - Survivor payments to more than one survivor
In Situation 1, on the death of Mr. X, his will directed the $20,000 in his TFSA held with a Canadian financial institution to be paid as to...
8 October 2010 Roundtable, 2010-0371961C6 F - Époux et conjoint de fait et CÉLI au décès
The deceased individual provided for the splitting of his TFSA equally between his wife (from whom he lived separate and apart) and his common-law...
Prohibited Investment
Administrative Policy
18 February 2009 External T.I. 2008-0304051E5 - TFSA - Mutual Fund being a Prohibited Investment
Mutual fund trusts will be considered to be prohibited investments if the holder of the TFSA, either alone or with other non-arm's length parties,...
Articles
Todd Miller, Michael Friedman, Carl Irvine, "The New RRSP/RRIF Anti-Avoidance Regime: A Roadmap and Tips for the Unwary", Taxation of Executive Compensation and Retirement, Vol. 23, No. 4, p. 1463
In light of the breadth of "significant interest" (p.1465):
It is possible that an individual could unknowingly hold a "significant interest" in...
Paragraph (b)
Subparagraph (b)(i)
Administrative Policy
22 November 2012 External T.I. 2012-0441781E5 F - Prohibited Investment - Cooperative
Before concluding that an investment in a cooperative could be a prohibited investment because of s. 207.01(1)(b)(i) of “prohibited...
Qualifying Transfer
Cases
Breton v. Attorney General, 2024 FC 555
The taxpayer accomplished the transfer of the TFSA that he held with Caisse Desjardins to the one held with Banque Nationale by withdrawing the...
Registered Plan Strip
Administrative Policy
25 February 2021 Internal T.I. 2020-0865641I7 - Settlement Payments to Registered Plans
After noting that it is CRA’s policy to consider that a settlement payment made to an RRSP or RRIF respecting an actionable loss suffered by it...
S3-F10-C3 - Advantages – RRSPs, RESPs, RRIFs, RDSPs, FHSAs and TFSAs
Definition can apply even where no property removal
3.34 The definition [of registered plan strip] is intended to apply even in situations...
1 June 2016 External T.I. 2015-0601211E5 - Mortgage loan from RRSP to make a shareholder loan
An individual, who is an RRSP annuitant, borrows the “Mortgage Loan” from the RRSP, with a principal residence mortgage granted in favour of...
16 October 2012 External T.I. 2012-0439151E5 - RRSP strips and prohibited investments
Respecting an expressed concern that the sale of a prohibited investment by an RRSP or RRIF to the annuitant for fair market value consideration...
RRSP Strip
Administrative Policy
14 February 2012 External T.I. 2011-0416621E5 F - REER, swap
Respecting a proposed swap of a savings bond held in an RRSP and a savings bond held in a non-registered account, before concluding that it was...
Swap Transaction
Administrative Policy
S3-F10-C3 - Advantages – RRSPs, RESPs, RRIFs, RDSPs, FHSAs and TFSAs
Permitted exceptions
3.25 Contributions, distributions to the plan’s controlling individual, and purchase and sale transactions between an...
12 December 2012 External T.I. 2012-0460611E5 - swap of securities between registered plans
[C]ontributions, distributions, and purchase and sale transactions between an individual's two plans with the same tax attributes (i.e., TFSA to...
24 August 2010 External T.I. 2010-0359001E5 - TFSA - Swap Transaction
Can an individual contribute a non-maturing GIC into his or her TFSA? CRA responded:
A "swap transaction", in relation to a TFSA trust,...
Unused TFSA Contribution Room
Administrative Policy
22 October 2015 Internal T.I. 2013-0486491I7 - Overdrafts in a TFSA
Where a trust ceases to be a TFSA pursuant to s. 146.2(5)(c), so that s. 146.2(8) deems the trust to have disposed of all its properties at fair...
22 November 2012 External T.I. 2012-0468941E5 F - TFSA - XXXXXXXXXX employee working outside Canada
Can someone working outside Canada open a self-directed tax-free savings account (“TFSA”)? After noting that an individual’s residence is a...
Paragraph (b)
Element D
Administrative Policy
25 February 2021 Internal T.I. 2020-0865641I7 - Settlement Payments to Registered Plans
After noting that it is CRA’s policy to consider that a settlement payment made to an RRSP or RRIF respecting an actionable loss suffered by it...
11 October 2019 APFF Financial Strategies and Instruments Roundtable Q. 4, 2019-0813421C6 F - TFSA - Survivor Payment - Decrease in FMV
The definition of “exempt contribution” in s. 207.01(1) contemplates that the “survivor” of an individual can make a contribution on an...
Subsection 207.01(4)
Administrative Policy
S3-F10-C2 - Prohibited Investments – RRSPs, RESPs, RRIFs, RDSPs, FHSAs and TFSAs
Inclusion of units held in relative's RRSP
2.12 In determining whether an individual has a significant interest in a trust, any units of the trust...
Paragraph 207.01(4)(a)
Administrative Policy
20 March 2015 External T.I. 2014-0528311E5 - Mortgage Investment Corporation - RRSP
Would a specified shareholder of a mortgage investment corporation include a brother or sister of the RRSP annuitant? After noting that a...
Subsection 207.01(5)
Administrative Policy
S3-F10-C1 - Qualified Investments – RRSPs, RESPs, RRIFs, RDSPs, FHSAs and TFSAs
Potential s. 162(7) penalty if due diligence failure
1.93 Subsection 207.01(5) requires the trustee of an RRSP, RRIF, RDSP, FHSA or TFSA, or the...
Subsection 207.01(6)
Administrative Policy
S3-F10-C1 - Qualified Investments – RRSPs, RESPs, RRIFs, RDSPs, FHSAs and TFSAs
Effect of deemed FMV disposition
1.77 Subsection 207.01(6) provides a special rule that applies when an investment becomes or ceases to be a...
12 July 2013 External T.I. 2012-0447191E5 - RRSP trust taxation under 146(10.1)
An RRSP acquired shares after March 23, 2011, which were listed on a foreign designated stock exchange and were worth $43 per share, but then...
Subsection 207.01(13)
Administrative Policy
28 May 2014 External T.I. 2013-0486111E5 F - RRSP, prohibited investment
The shares of an RRSP, which were prohibited investments held by it on 23 March 2011 and for which it made the transitional benefit election in s....