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Financial Information 		TFSA Investments

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RRSPs RRIFs and TFSAs -> Tax-free savings accounts (TFSAs) -> Investments
Income Tax Act s. 207.01

Tax-free savings account investments

Qualified investments are permitted to be held in a TFSA.  Qualified investments generally include all RRSP qualified investments, as long as these are arm's-length investments.

Non-qualified and prohibited investments may not be held in a TFSA:
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Non-qualified investments include, for example, land and general partnership units.

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Prohibited investments are specifically identified in the Income Tax Act, and include property that is
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a debt of the TFSA holder

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shares in, an interest in, or a debt of

  1. a corporation, partnership or trust in which the holder has a significant (10% or greater) interest, or

  2. a person or partnership that does not deal at arm's length with the holder, or with a person or partnership described in (i)

When prohibited or non-qualified investments are held in a TFSA, taxes will apply.  Non-qualified and prohibited investments are tax differently.  See taxes payable re TFSA, which also discusses proposed amendments regarding these taxes.

Tax Tip:  Don't hold non-qualified or prohibited investments in your TFSA.

Previous:
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What is better - TFSA or RRSP?

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TFSA contributions

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Don't over contribute!

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Unused contribution room

Next:
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TFSA withdrawals

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Asset transfer (swap) transactions

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Taxes payable re TFSA

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Marital breakdown

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Death of the TFSA holder

Back to TFSA main page.

 

Revised: January 28, 2012

 

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