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Self Direct Your Tax Sheltered And Unsheltered Accounts

Canadian tax law provides for taxpayers to self direct their tax sheltered savings. Above, we provide links to the forms to be filled out and the procedures that need to be followed to create your own, or transfer existing self directed, tax sheltered accounts. The last link provides information on how to invest outside your tax sheltered accounts, to ensure that your funds are held under the appropriate Trust conditions until all Minimum requirements are met.

The TFSA and RRSP forms are designed to be filled out on screen as you go through them. There are completed, sample forms for you to reference, so you don't have to worry about making an error. Send the forms to upon completion, and our staff will review each form prior to them being forwarded to Western Pacific Trust Company (WPTC), the custodian of the sheltered accounts. WPTC is the company that provides Trust services to Solara Members, furnishing everything necessary for the creation of a Self Directed RRSP or TFSA account.

A Registered Retirement Savings Plan (RRSP) is a type of Canadian tax account for holding savings and investment assets. RRSPs have various tax advantages compared to investing outside of tax sheltered accounts. They were introduced in 1957 to promote savings for retirement.

Eligible Investments

They must comply with a variety of restrictions stipulated in the Canadian Income Tax Act. Approved assets include savings accounts, guaranteed investment certificates (GICs), bonds, mortgage loans, mutual funds, income trusts, corporate shares (foreign and domestic, public and private), royalty units and foreign currency. Rules determine the maximum contributions, the timing of contributions, the assets allowed, and the eventual conversion to a Registered Retirement Income Fund (RRIF) at age 71.

The Tax-Free Savings Account (TFSA) is an account that provides tax benefits for saving in Canada. Investment income, including capital gains and dividends, earned in a TFSA is not taxed, even when withdrawn. Contributions to a TFSA are not deductible for income tax purposes, unlike contributions to Registered Retirement Savings Plans (RRSPs). The TFSA was introduced in 2009 by the Government of the day, in the hopes of stimulating investment in the technology industry in Canada.

Eligible Investments

A TFSA can hold any investments that are RRSP-eligible, including publicly traded shares on designated exchanges, eligible shares of private corporations, certain debt obligations, installment receipts, money denominated in any currency, trust interests including mutual funds and real estate investment trusts, annuity contracts, warrants, rights and options, registered investments, royalty units, partnership units, and depository receipts. Despite the name, a TFSA does not necessarily need to be a cash savings account. Like RRSPs, a TFSA may contain cash and/or other investments.

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