Tax payable on an advantage
If the holder or a person not dealing at arm's length with the holder (including the TFFSA itself) was provided with an advantage in relation to their TFSA during the year, a 100% tax is payable which is:
- in the case of a benefit, the fair market value (FMV) of the benefit
- in the case of a loan or a debt, the amount of the loan or debt
To calculate the taxes payable on an advantage extended you must fill out Form RC243, Tax-Free Savings Account (TFSA) Return.
When an advantage is extended by the issuer of a TFSA, the issuer, and not the holder, is liable for the tax. The issuer must file Form RC298, Advantage Tax Return for RRSP, TFSA, or RDSP Issuers, RESP promoters or RRIF Carriers.
For more information, see Income Tax Folio S3-F10-C3, Advantages - RRSPs, RESPs, RRIFs RDSPs and TFSAs.
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