Recently I've been liberating cash in preparation for buying an annuity. To my relief and delight BMO InvestorLine allowed me to swap cash in my LIRA for bonds in my RRIF, saving me the considerable embedded commission (around 1% from what I have observed from bid-ask spreads) cost of selling the bonds in the RRIF.
It's good to know that at least one broker has not thrown out the baby with the bathwater by banning any and all swaps after the Canada Revenue Agency clamped down on abusive gaming of the system to boost tax-protected balances. Swaps between accounts with like tax properties are still perfectly legal (per this post at TaxInterpretations.com) but some brokers seem to have simply stopped doing any and all swaps (e.g. the discussion following this post at Canadian Capitalist and this other CC post). Swaps between registered retirement accounts like RRSPs, LIFs, LIRAs, RIFs, or TFSA to TFSA are ok but not between TFSA and RRSP (or other retirement) or with taxable accounts.
Thursday, 2 April 2015
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