Do I have to declare it in my taxes if I make transactions in my RRSP?

Gena Katz, a chartered accountant and executive director with Ernst and Young, has the answer.

Gena Katz 28 January, 2007 | 2:00PM
Dear Expert,

I am thinking about transferring money from one fund to another within my RRSP. Do I have to concern myself with Canadian income taxes, and should I be sending in any paperwork with my tax returns for those RRSP transfers and/or gains that the fund achieved since I bought it?

Expert Answer:

RRSPs are exempt from taxation and therefore, investment income earned and capital gains realized within a plan are not subject to tax in the plan. This means that you may purchase, sell and exchange investments within an RRSP with no tax consequences. As long as the investments are RRSP eligible and you don't withdraw money from the plan, transfers between different funds within an RRSP do not trigger a taxable event and you are not required to report anything on your tax return.

In addition to tax-free transfers within an RRSP, you may also make tax-free transfers between different RRSP accounts. Ordinarily, RRSP withdrawals are fully taxable, however if amounts are transferred directly between plans that have the same annuitant, the withdrawal doesn't have to be included in the annuitant's income, and the deposit to the recipient plan is not considered an RRSP contribution.

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Gena Katz

Gena Katz