Requesting a TFSA transfer
On this page
- How to transfer between your TFSAs
- Avoid doing your own transfers
- Transfers due to a divorce or separation
How to transfer between your TFSAs
To move funds from one Tax-free Savings Account (TFSA) to another, or from one financial institution to another, ask the receiving financial institution to do a direct transfer. By doing a direct transfer, the funds you move will not affect your TFSA contribution room and you will avoid any tax implications.
Some financial institutions may charge a fee for processing a transfer.
Types of transfers
Most financial institutions offer 3 types of TFSA transfers, but this may vary.
- In-kind transfer
- Moves your existing investments as they are without selling them
- Cash transfer
- Sells your investments first, then transfers the money
- Partial transfer
- Transfers only a portion of your TFSA
Avoid doing your own transfers
Do not withdraw funds yourself and then contribute them to a different TFSA. This is not a direct transfer and it may have serious tax consequences. The contribution is considered a new contribution. If you contribute more than your available contribution room allows, you will have an excess amount in your TFSA that is subject to a monthly tax of 1%.
Example: How doing your own transfer can have tax consequences
Alexis is 43 years of age and a resident of Canada. In 2023, she opens a TFSA and contributes the maximum amount allowable for years 2009 to 2023. This is a total of $88,000.
In early 2024, Alexis contributes $7,000, the dollar limit for that year.
Then Alexis gets an offer for a better interest rate on a TFSA issued from a different bank. She decides to take advantage of the offer. In April 2024, she withdraws $50,000 from her TFSA and contributes it to a TFSA at the new bank.
Since Alexis withdrew the money from her existing TFSA and contributed it to the new TFSA herself, the transaction is considered a new contribution. In this case, it is an over-contribution of $50,000.
Because Alexis did not do a direct transfer through the issuer of the new TFSA, she will be assessed by the CRA and may have to pay a 1% monthly tax on the excess amount. This comes to $500 per month until she removes the excess amount.
To avoid this situation, Alexis should have requested the issuer of the new TFSA do a direct transfer from her existing financial institution.
(The $50,000 of contribution room created by the withdrawal will be added back to her TFSA the next calendar year.)
For more information:
Transfers due to a divorce or separation
If there's a divorce or breakdown in your marriage or common-law partnership, you may transfer money from one person's TFSA to another through your financial institution. A direct transfer through the receiving financial institution will not affect either person's available contribution room.
The transfer will qualify as a direct transfer and you will avoid tax penalties if both of the following conditions are met:
You and your spouse or common-law partner are living separate and apart at the time of the transfer
The amount is transferred under a decree, order, or judgement of a competent tribunal, or under a written separation agreement
Since the transfer is not considered a withdrawal, it will not be added back as contribution room the next calendar year. The transfer will also not remove any excess amount, if one exists, from the account of the person doing the transfer.
If, instead of using a direct transfer, one person withdraws the funds and the other person contributes them to their own TFSA, that contribution is treated as a regular contribution. It will count against the receiver’s available contribution room and may lead to an over-contribution if they do not have enough available room.