Transferring shares from Registered account to non-registered?

Yes. It is treated like any withdrawal from a registered account. Fees depend on the brokerage. Most would probably be free. Note for RRSPs, the deregistration would likely be the closing price for the day.

xgbsSS wrote: ↑ Yes. It is treated like any withdrawal from a registered account. Fees depend on the brokerage. Most would probably be free. Note for RRSPs, the deregistration would likely be the closing price for the day.

Also don't forget potential tax for taking out from RRSP as the value will be added to your current income.

xgbsSS wrote: ↑ Yes. It is treated like any withdrawal from a registered account. Fees depend on the brokerage. Most would probably be free. Note for RRSPs, the deregistration would likely be the closing price for the day.

Can you transfer them in kind keeping the shares and not having to sell them?

Or another option. If I open questrade margin accounts for TFSA and RRSP, can I transfer my shares in kind without buying or selling them?

I have heard questrade margin tfsa and RRSP allow OTC stocks. Part of the reason why I'm looking for options to move these OTC stock shares out is because they seem to be counted as non qualified investments as per TD.

jeffyjaixx wrote: ↑ Can you transfer them in kind keeping the shares and not having to sell them?

Yes

jeffyjaixx wrote: ↑ Hi guys,

I have a question. Are you able to transfer OTC stock shares in kind from a registered account like TFSA/RRSP to a non registered account? How does it work if yes? Any fees or similar?

Thanks in advance.

OTC stocks generally do not qualify for Canadian registered accounts. It would surprise if they were permitted at Questrade.

1.18 Over-the-counter (OTC) quotation systems, such as the OTC Bulletin Board and OTC Link ATS (formerly Pink Sheets) in the United States, are not designated stock exchanges. As a result, securities that trade on OTC markets are generally not qualified investments. However, OTC securities can still qualify if they are cross-listed on a designated stock exchange or if the securities meet other qualification conditions such as those that apply to certain Canadian small businesses (see ¶1.55 to 1.66).

And do not overlook what @ml88888888 said: Even if you transfer in kind to a non-reg account, it will be treated as a withdrawal (de-registration) and income tax will be withheld.
This means if your OTC stock is worth $10,000 shifting it to your non-reg account will also require your broker to withhold an additional $2,000 in income tax.

Finally, if your current broker has advised you that the OTC holding is non-qualified you should do something immediately, before penalties get painful.

fireseeker wrote: ↑ OTC stocks generally do not qualify for Canadian registered accounts. It would surprise if they were permitted at Questrade.

Depends on the OTC. ADRs on qualified exchanges, equivalent shares on other exchanges are OK.

jeffyjaixx wrote: ↑ Or another option. If I open questrade margin accounts for TFSA and RRSP, can I transfer my shares in kind without buying or selling them?

I have heard questrade margin tfsa and RRSP (...)

No, you cannot do that. There is no such thing as "margin TFSA" or "margin RRSP" accounts at Questrade or any other broker. Margin accounts are always non-registered.

It's true Questrade has a (questionable) feature called "margin power" for TFSA, but it still has to comply to the same "qualified investments" rules defined by the CRA. Questrade cannot relax the CRA rules for you.

I guess it is possible TD and Questrade interpret the rules differently. Are you willing to bet Questrade has better lawyers than TD? Are you going to sue the CRA and/or Questrade if the CRA decides your investments were not qualified after all? It's not a crazy idea, as the brokers do have some responsibility of watching for non-qualified investments. But is it really worth it, or it's better to take the TD's opinion on this.

fireseeker wrote: ↑ OTC stocks generally do not qualify for Canadian registered accounts. It would surprise if they were permitted at Questrade.



And do not overlook what @ml88888888 said: Even if you transfer in kind to a non-reg account, it will be treated as a withdrawal (de-registration) and income tax will be withheld.
This means if your OTC stock is worth $10,000 shifting it to your non-reg account will also require your broker to withhold an additional $2,000 in income tax.

Finally, if your current broker has advised you that the OTC holding is non-qualified you should do something immediately, before penalties get painful.

I suppose my options are sell my OTC stocks, hope it relists to a DSE in 3 months or transfer in kind to a non registered if I want to keep the shares. Those are my 3 main options?

If they are lower than when I bought them now, does transferring them in kind to a non registered still have TD withhold 20% of its total?

jeffyjaixx wrote: ↑ If they are lower than when I bought them now, does transferring them in kind to a non registered still have TD withhold 20% of its total?

Yes, the standard withholding tax based on the value of your in-kind withdrawal applies. The withholding tax will have to be paid with cash from your RRSP.

fireseeker wrote: ↑ Yes, the standard withholding tax based on the value of your in-kind withdrawal applies. The withholding tax will have to be paid with cash from your RRSP.

Thanks.

So I would need to have the cash in my RRSP and not the non registered account so when I deregister the shares, they will just take the withholding tax from my RRSP cash balance?

Also just to confirm, it's always 20% or are there percentage tiers based on the value of your shares?

For example, say when you bought it was like 5k worth 2 years ago, now it's 2000, is the withholding tax 20% of the original 5k or what they are worth now at market value of 2k at the time of deregistering? Is there witholding tax on TFSA as well or just RRSP?

jeffyjaixx wrote: ↑So I would need to have the cash in my RRSP and not the non registered account so when I deregister the shares, they will just take the withholding tax from my RRSP cash balance?

Typically, yes. You can check with your broker what happens if there's not enough cash in RRSP for the withholding tax; I expect they'd cancel the transaction, but maybe some offer alternatives.

jeffyjaixx wrote: ↑Also just to confirm, it's always 20% or are there percentage tiers based on the value of your shares?
...
is the withholding tax 20% of the original 5k or what they are worth now at market value of 2k at the time of deregistering? Is there withholding tax on TFSA as well or just RRSP?

It's actually 10-30% (different in Quebec), depending on the total value of your withdrawal. RRSP only.