RE: RE: RE: Salman Partners comment - Mac That's correct cbrit. As I pointed out earlier, any shares in your RRSP or TFSA are not affected by the capital gains tax. However, unfortunately with an RRSP the CRA has us by the short hairs. Why? Well when we finally decide to draw money out of our RRSP, all withdrawals are deemed earned income, not capital gains, and are included in our gross income for that year, and therefore raise our marginal tax rate for that year, and then we are taxed on the aggregate income at the increased marginal tax rate.
I used to encourage my Finance students at UBC to avoid the RRSP route, especially if they planned on investing in potentially high risk high return equities. However when I accepted my Faculty position at the LSE in the early 90s I decided to collapse my University pension. I had to create an RRSP at the time to avoid a tax hit. The problem - if you can call it that - has been that my RRSP has grown by a factor of more than 50 in the past 20 years. When I start mandatory withdrawals at age 71, CRA will be first in line.
It seems the CRA have us in their cross-hairs whichever way we turn. One of my nieces is with CRA Audit Group. When I mention to her that investors take all the risk but when we make money CRA are there for their share, my argument falls on deaf ears. No compassion!
Cheers,
Brit