Gold in an RRSP, TFSA or FHSA

RRSP and RRIF

What is allowed: Gold bullion coins, bars and certificates can be qualified investments under Income Tax Regulations 4900(1)(t), (u) and (v). As explained by the CRA in 2005: legal tender coins must be at least 99.5% gold, produced by the Royal Canadian Mint, worth no more than 110% of their metal value, and bought directly from the Mint or a 'specified corporation' (a regulated Canadian bank, trust company, credit union, insurer or securities dealer). Bars, ingots and wafers must be at least 99.5% gold, made by a refiner accredited by the London Bullion Market Association, hallmarked with fineness and weight, and bought from the refiner or a specified corporation. Rare or collector coins are not qualified investments. Listed gold ETFs qualify as securities listed on a designated stock exchange.

Storage: The plan trust must hold the investments. The Royal Canadian Mint says registered-account metal is bought through a regulated dealer or brokerage that services these accounts, with allocated or unallocated storage, and that storage and insurance costs apply. The CRA material opened does not describe storage rules.

Watch out for:

• Coins valued mainly for rarity, or worth more than 110% of their metal content, do not meet the regulation.
• Bullion must come from the producer or a regulated 'specified corporation', not from any seller.
• Holding a non-qualified or prohibited investment in a registered plan leads to tax; the two categories are taxed differently.

TFSA

What is allowed: Gold bullion coins, bars and certificates can be qualified investments under Income Tax Regulations 4900(1)(t), (u) and (v). As explained by the CRA in 2005: legal tender coins must be at least 99.5% gold, produced by the Royal Canadian Mint, worth no more than 110% of their metal value, and bought directly from the Mint or a 'specified corporation' (a regulated Canadian bank, trust company, credit union, insurer or securities dealer). Bars, ingots and wafers must be at least 99.5% gold, made by a refiner accredited by the London Bullion Market Association, hallmarked with fineness and weight, and bought from the refiner or a specified corporation. Rare or collector coins are not qualified investments. Listed gold ETFs qualify as securities listed on a designated stock exchange.

Storage: The plan trust must hold the investments. The Royal Canadian Mint says registered-account metal is bought through a regulated dealer or brokerage that services these accounts, with allocated or unallocated storage, and that storage and insurance costs apply. The CRA material opened does not describe storage rules.

Tax: If a TFSA acquires a non-qualified investment, the holder owes a tax of 50% of its fair market value when acquired (or when it became non-qualified), reported on form RC243. The 50% tax can be refunded if the investment is disposed of by the end of the next calendar year, unless the holder knew or should have known it was non-qualified. Income from it can face a 100% advantage tax.

Watch out for:

• A 50% tax applies to non-qualified investments, plus a possible 100% tax on income they earn.
• No refund of the 50% tax if the holder knew or should have known the investment was non-qualified.
• If an investment is both non-qualified and prohibited, the CRA treats it only as prohibited.

FHSA (First Home Savings Account)

What is allowed: The CRA's qualified investments folio (S3-F10-C1) covers FHSAs alongside RRSPs and TFSAs, and the Nova Scotia Securities Commission lists FHSAs among the accounts where gold and silver bullion coins, bars and certificates are qualified. The CRA's FHSA page lists common qualified investments (cash, mutual funds, most listed securities, GICs, government savings bonds) and does not mention bullion.

Storage: As for other registered plans, investments are held by the FHSA trust through the issuer.

Tax: If an FHSA trust acquires a non-qualified investment, the tax is 50% of the property's fair market value when acquired or when it became non-qualified; it may be refundable in some cases.

Watch out for:

• The 50% tax on non-qualified investments applies to FHSAs as it does to TFSAs.