Registered Plan Fees – CRA’s New Policy

CRA has announced that investment management fees on registered plans such as RRSPs, RRIFs and TFSAs can no longer be paid from outside the registered accounts. CRA now considers that paying fees on a registered account using unregistered money creates an “advantage” because it indirectly increases the value of the registered plan. This is a change in CRA’s administrative position.

Under this new policy CRA has indicated that continuing to pay registered account management fees with unregistered money could attract tax in the amount of the fees paid. Also, the fees paid could be considered a contribution to the registered plan which could exceed the taxpayer’s contribution room, attracting over contribution penalties.

CRA will be issuing a full revised policy in early 2017. So far they have indicated that CRA will not apply this position until January 1, 2018.

We will continue to watch the updates as they are made available and will be in touch when/if changes are needed.

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