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[OP]
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Jun 7, 2005
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TSFA transfer

I have a couple of questions regarding the TSFA transfer:

1. I have a TSFA account in both TD and Tangerine (with cash balance). Can I assume I can't transfer the balance from one to another like transferring cash ?

2. If the answer is yes, I can only transfer by cashing it first before transfer, right ? And if I cash it now in 2020 and transfer the cash to another bank, I will not be able to put it back to the TSFA account until 2021. Is it correct ?

Thanks
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Dec 14, 2010
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You have 2 options. Transfer in-kind, which doesn't affect your contribution room, and transfer by withdrawing and contributing again.

Depending on the fees to do in-kind, it might not be worth it. The withdraw can always be done anytime. The contribution to your room must adhere to the available limit. If you don't have extra contribution room this year, then you can only contribute it back next year.


Rod
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[OP]
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Jun 7, 2005
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Thanks.

I just want to the cash from TSFA account in Tangerine to the TSFA in TD as there is much investment option in Tangerine. And since I am transferring the existing TSFA balance, thus there is no issue with existing the limit.

Someone told me I need to take the amount out of the TSFA first before transferring it to another financial institution. But then, I will not be able to put it back into the TSFA account in the other financial institution within the same calendar year, is is true ?
rodbarc wrote: You have 2 options. Transfer in-kind, which doesn't affect your contribution room, and transfer by withdrawing and contributing again.

Depending on the fees to do in-kind, it might not be worth it. The withdraw can always be done anytime. The contribution to your room must adhere to the available limit. If you don't have extra contribution room this year, then you can only contribute it back next year.


Rod
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Dec 14, 2010
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rdx wrote: Thanks.

I just want to the cash from TSFA account in Tangerine to the TSFA in TD as there is much investment option in Tangerine. And since I am transferring the existing TSFA balance, thus there is no issue with existing the limit.

Someone told me I need to take the amount out of the TSFA first before transferring it to another financial institution. But then, I will not be able to put it back into the TSFA account in the other financial institution within the same calendar year, is is true ?
This is only true if by putting the amount back exceeds your total available limit. You can confirm your available limit by logging into CRA's My Account. For 2020, total contribution limit if you never withdraw and if you were eligible since inception is $69,500. So if you have $20,000 contributed in total, which was done this year, you can take out the $20,000 and contribute back this year again. Now your total contribution used is 40,000. You still have $29,500 room available in this example. Once you maximize your contribution room, then for next year you get an annual room increase ($6,000 adjusted by inflation) + whatever else got withdrawn this year.


If you already maximized your contribution this year and you want to move the whole amount back then you can only move it back next year. You will then have whatever you withdraw this year + the annual increase next year ($6,000 estimated).


Rod
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Feb 1, 2012
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rdx wrote: Thanks.

I just want to the cash from TSFA account in Tangerine to the TSFA in TD as there is much investment option in Tangerine. And since I am transferring the existing TSFA balance, thus there is no issue with existing the limit.

Someone told me I need to take the amount out of the TSFA first before transferring it to another financial institution. But then, I will not be able to put it back into the TSFA account in the other financial institution within the same calendar year, is is true ?
You have two options: 1) registered transfer or 2) withdraw cash from Tangering and redeposit to TDDI.

Option 1) To do a registered transfer you need to fill in a form at TDDI, and they will request the registered transfer from Tangerine. Since TDDI won't allow you to hold proprietary Tangerine funds, Tangerine will sell your funds then transfer the cash to TDDI. The TDDI form will have an option to transfer in cash or in kind. Choose cash. There is no tax impact to this method but the drawback is Tangering will charge you $125 for a registered transfer. Depending how much you transfer, TDDI may reimburse the transfer fee if you ask, but in my experience TDDI requires $50 k to be transferred to reimburse the fee.

Option 2) Withdraw cash from Tangerine and then deposit the cash to TDDI. The drawback of this method is when you withdraw cash you don't get that contribution room back until Jan 1 next year.

But say you currently have $20k in Tangerine TFSA, but you also have $30k existing TFSA contribution room. You could withdraw cash from Tangerine and immediately deposit it to TDDI, using up $20k of your existing room. Then next year you would get the $20k room back, in addition to next year's new contribution room. If you don't have extra room now, just wait until December to withdraw the cash from Ting, then deposit it to TDDI in Jan 2021.

Here are a couple of links that explain it:
https://www.tangerine.ca/forwardthinkin ... nsequences
https://www.tangerine.ca/file_source/fb ... ule-En.pdf

https://www.canada.ca/en/revenue-agency ... sfers.html

Hope this helps.
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[OP]
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Jun 7, 2005
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Ok, like I said, I am not adding additional amount to my TSFA but only transferred the existing balance from one account to another. The total balances from both accounts are within my total TSFA limit.
rodbarc wrote: This is only true if by putting the amount back exceeds your total available limit. You can confirm your available limit by logging into CRA's My Account. For 2020, total contribution limit if you never withdraw and if you were eligible since inception is $69,500. So if you have $20,000 contributed in total, which was done this year, you can take out the $20,000 and contribute back this year again. Now your total contribution used is 40,000. You still have $29,500 room available in this example. Once you maximize your contribution room, then for next year you get an annual room increase ($6,000 adjusted by inflation) + whatever else got withdrawn this year.


If you already maximized your contribution this year and you want to move the whole amount back then you can only move it back next year. You will then have whatever you withdraw this year + the annual increase next year ($6,000 estimated).


Rod
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Mar 10, 2018
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rdx wrote: Ok, like I said, I am not adding additional amount to my TSFA but only transferred the existing balance from one account to another. The total balances from both accounts are within my total TSFA limit.
Transfers between your own TFSAs
Note

If you withdraw the funds yourself and contribute the same funds to another TFSA, this transaction would not be considered a direct transfer and could have tax consequences.

In this situation, the funds will be treated as a regular contribution which will reduce your TFSA contribution room for the year. If you do not have sufficient contribution room, you will have over-contributed to your TFSA and will be subject to a 1% tax on the highest excess amount in the month, for each month that the excess remains in the account.
https://www.canada.ca/en/revenue-agency ... tfsas.html
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[OP]
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Jun 7, 2005
8441 posts
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I found the following article with some helpful information.
https://www.moneysense.ca/save/whats-th ... titutions/

By the way, I am a bit confused regarding the maximum contribution limit. If someone has contributed the max allowed amount ($63,500) in the TSFA account and the account has now grown over the limit to $70,000. Does it mean he/she is ok to transfer the whole $70K in kind from one financial institutional to another ?

What if he/she takes out the whole $70,000 ? I assume he/she can only put the max of $63,500 back into the TSFA account, right ? What happens to the balance of $6,500 taken out. It is tax free, right ?

And if he/she takes out $63,500 and leave the $6,500 in the TSFA, he/she will only be able to put the maximum of $57,000 ($63,500 max - $6,500) back into the TSFA until next year (when new contribution amount is available), right ?

Thanks for any help.
[OP]
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Jun 7, 2005
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callernamet wrote: Transfers between your own TFSAs
Yes, transfer between my own TFSA accounts from two different financial institutions.

And the money I plan to transfer from my Tangerine TFSA account is actually cash that I parked in there, and it is not under any mutual fund.
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Feb 1, 2012
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Total contribution limit for 2020 went up by $6000 to $69,500.

And yes, you can safely transfer your original investment plus investment gains to another TFSA, or in your example $70k.

Or if you withdraw $70k cash this year, then $70k gets added to your available contribution next year, plus whatever the 2021 yearly limit is.

Example 1 – TFSA contribution room

Example 2 – TFSA contribution room
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