People are always looking for ways to beat the system. Getting money out of an RRSP or RRIF without paying tax may sound like a good idea, particularly if your desperately trying to get out from under. Resist the urge to participate in any such "scheme."
The Tax Man wants you to know he's reviewing these kinds of transactions thoroughly and has already reassessed thousands of taxpayers. He warns that you should avoid any offer of:
- Withdrawal of funds from an RRSP or RRIF without paying tax. Promoters often promise to return part of the taxpayer's investment by offshore debit or credit cards, offshore bank accounts, or loan-back arrangements,
- Immediate access to assets in "locked-in" RRSPs or RRIFs, and
- Income tax deductions of three or more times the amount invested in an RRSP.
While these schemes are made to appear very professional and, therefore, legitimate, they are not. Even if you are given opinion letters from professionals that give the impression that the letter writer endorses the scheme, don't bite.