Want to contribute to your RRSP while diversifying your portfolio? Find out which investments are eligible.
What happens if there are non-qualified or prohibited investments in your RRSP?
There are consequences, including a special tax of up to 50% of the fair market value of the prohibited investment. This tax is calculated from the purchase date or the date on which the investment become prohibited.
Prohibited investments are generally investments you have close ties with. For example, if you directly or indirectly hold 10% or more of a company's shares or have significant interest in a trust, the shares of this company or trust are prohibited.
If an investment is both prohibited and non-qualified, it will be treated as a prohibited investment. If you think you might have prohibited investments in your RRSP, speak to an advisor as soon as possible to rectify the situation.