Deduction for Carrying Charges and Interest Expenses

In your income tax return, you can deduct carrying charges and interest expenses incurred to earn investment income. Such expenses include:

  • investment management or administration fees, such as fees you paid with respect to shares included in a Stock Savings Plan II (SSP II)
  • fees, other than commissions, paid to certain investment counsellors
  • amounts paid for the safekeeping of your shares and securities
  • interest fees paid to purchase an interest in a partnership of which you were a specified member

Non-deductible expenses

A number of expenses cannot be deducted, including:

  • management or administrative fees related to your
    • registered retirement savings plan (RRSP)
    • pooled registered pension plan (PRPP) (including a voluntary retirement savings plan (VRSP))
    • registered retirement income fund (RRIF)
    • tax-free savings account (TFSA)
  • commissions paid to a broker on the purchase or sale of shares or mutual fund units
  • interest paid on loans taken out in order to make contributions to:
    • a registered pension plan (RPP)
    • a deferred profit-sharing plan (DPSP)
    • an RRSP
    • a pooled registered pension plan (PRPP/VRSP)
    • a registered education savings plan (RESP)
    • a registered disability savings plan (RDSP)
    • a TFSA

For more information, see the instructions for line 231 in the guide to the income tax return (TP-1.G-V).

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