• What is a TFSA?
• TFSA Information
• TFSA vs RRSP
• TFSA Benefits
• TFSA withdrawals
• Taxation of a TFSA
• TFSA Rules and Regulations

Additonal Resources

• TFSA Pamphlet
• RRSP Calculator

TFSA withdrawals

Depending on the type of agreement that you have for your TFSA, you can generally withdraw any amount from the TFSA at any time and for any reason, with no tax consequence. For information on withdrawing from your TFSA, contact your TFSA issuer. The withdrawals will also not affect your eligibility for federal income-tested benefits and credits. For further information see Impact on Income-tested Benefits.

Withdrawals, excluding qualifying transfers, made from your TFSA in the year will be added back to your TFSA contribution room at the beginning of the following year.

You cannot contribute more than your TFSA contribution room in a given year, even if you make withdrawals from the account during the year. If you do so, you will be subject to a tax of 1% of the highest amount in the month, for each month you are in an overcontribution position.

You don't need to report any contributions or withdrawals you made during the year on your individual tax return.

Generally, the types of investments that will be permitted in a TFSA are the same as in a registered retirement savings plan (RRSP).

This would include mutual funds, securities listed on a designated stock exchange, Guaranteed Investment Certificates (GICs), bonds, and certain shares of small business corporations.

You can contribute foreign funds to a TFSA. However, your financial institution will convert the funds to Canadian dollars when reporting this information to the CRA. Your contributions cannot exceed your annual contribution limit in Canadian dollars.

You can also make "in kind" contributions to your TFSA, as long as the property is a qualified investment. We will consider that you have disposed of the property for its fair market value (FMV) at the time of the contribution. If the FMV is more than the cost of the property, you will have to report the capital gain in your income tax return. However, if the cost is more than the FMV, the resulting capital loss cannot be claimed. The amount of the contribution will be equal to the FMV of the property.