for RRSP scheme that could put you in trouble. Investing in schemes that
promise you tax free withdrawals from RRSPs (Registered Retirement Saving Plan)
and RRIFs (Registered Retirement Income Fund) could result in the loss of your full
promotion offering a “tax-free” withdrawal to access your RRSP funds directly
or indirectly. Some examples of observed RRSP schemes by CRA (Canada Revenue
Agency) have included:
Withdrawal of funds from an
RRSP or RRIF without paying tax , where promoters often promise to return part
of individual’s investment using offshore debit, credit card, offshore bank
accounts, or loan-back arrangements.
Income tax receipts providing
deduction of three or more amount contributed to an
RRSP and unrealistic returns on investments.
Promoters of these types of schemes direct the owners of RRSP or RRIF to purchase a particular investment through a specific trustee. The investment could be share in a company, a part in a co-operative, a mortgage, or other type of investments.
CRA is highly recommending people not to invest in such schemes that could result in losing your entire saving to fraudulent promoters. By doing so, not only you lose your savings also your tax return get reassessed. Over the past years to now, CRA has reassessed over 5,000 investors who participated in these schemes resulting in additional taxable income roughly $250million.
Are you thinking of investing your money? It is very important that you get independent legal and tax advice from a tax professional that is not connected to investment organization or promoters. If you are approached with such offer and not sure it is one of such scheme that revenue agencies are already issued alert, give us a call to book a consulting session with us, it will save you lots of money in tax, interest and gross negligence penalty.