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Can I move non-RRSP investments into my RRSP? Do I have to cash them in first?

You can transfer various investments, including Canadian stocks, bonds and mutual funds, into your self-directed RRSP, as is, without having to cash them.

This is known as an "in kind" transfer, and is a way of making an RRSP contribution without having to come up with cash.

Any assets transferred into your RRSP must qualify as RRSP investments. These include:

  • Cash.
  • Government, Crown corporation or municipal bonds.
  • GICs, term deposits and treasury bills.
  • A mortgage of interest in a mortgage or pool of mortgages secured by real property.
  • Shares or bonds of corporations listed on Canadian stock exchanges.
  • Mutual funds.
  • Shares listed on certain foreign stock exchanges, bonds of certain foreign governments and mutual funds investing in foreign markets (although no more than 30% of the original purchase price of an RRSP can be invested directly in foreign assets).

Remember that a transfer of investments into your RRSP can trigger a capital gain -- and a tax bill -- since the transfer will be deemed to have taken place at the investment's fair market value. If you had put $10,000 into a mutual fund five years ago and you transfer it today into your self-directed RRSP when it's worth $15,000, Canada Customs and Revenue Agency (CCRA) will want you to pay tax on 50% of your $5,000 gain. If you are in the 50% tax bracket, $1,250 ($5,000 x 50% x 50%) would go to taxes. This example assumes that taxes have not already been paid on any of this gain over the five years.

You can not claim a capital loss on the transfer of investments to your RRSP. If you plan to transfer investments into your RRSP, make sure they are appropriate for your needs and qualify as RRSP investments.

Consider seeking professional investment advice.