You can basically open a TFSA account with any financial institution. But what happen if you are not happy with your advisor and you want to switch bank? Is the TFSA transfer form complicated? Will you be taxed? Who fill in the information on the TFSA transfer form?
The transfer of an investing account can sound complicated, read risky for some investors. Fortunately, the process has been made quite easy and straight forward. We tried to compile all the questions and answers regarding TFSA account transfer form one institution to another here:
Where Can I Find The TFSA Transfer Form?
The TFSA transfer form is similar to a RRSP transfer form if you have ever signed one. This is usually a one page document that needs to be completed by your financial institution.
Who Should Complete the TFSA Transfer Form?
As it is the case with the RRSP transfers, most financial institutions have their own copy of the TFSA transfer from ready. They will be more than happy to complete the information with you and take care of the transfer process. The form is a one pager document that is quite easy to understand.
Do I Need Other Document to Transfer My TFSA?
Ideally, a copy of your most recent TFSA account statement is required. This is because we can find all the required information for the transfer (account number, name and address of the company to send the form, current assets). The transferring institution might also request a TFSA account number prior to send the money. Therefore, it is preferable to open your new TFSA account prior to sign the TFSA transfer form.
Are There Fees Associated with a TFSA Transfer?
Depending on the type of investment and financial institutions, there might be fees related to a transfer. In order to limit the transfer fee, I suggest you call your current financial institution where you have you TFSA and request what the possible fees are. There are usually small transfer fees that the other institution will more likely pay for you. However, you are always better to double check that with your new institution and not take it for granted.
If you have invested in mutual funds you also might have selling fees. The best way to transfer your account is to do it “in kind” and not “in cash”. This is an option you can find on the TFSA transfer form.
How The TFSA Transfer Process Work?
The transfer process is straight forward: the financial institution where you want to transfer your account will send the transfer form to your previous institution. Then, they will take care of the follow-up and make sure they receive your holdings or check.
The previous institution will then advise the Government that the account has been transferred to another institution. You don’t have to complete any other form or report it on your tax report.
Will I be Taxed if I Transfer My TFSA?
There are no tax implications with a TFSA transfer.
Can I Transfer My TFSA Holding in a RRSP?
You can also transfer money invested from your TFSA to your RRSP account. The process is quite simple and handled by your financial institution. No taxes (capital gain and capital losses) are triggered on your investment upon the transfer. The good news is that you will still receive your tax deduction based on the amount of the withdrawal from your TFSA (regardless how much you have contributed). Keep in mind that all TFSA contribution creates additional contribution room the following calendar year. Therefore, there are no tax downsides to contribute to your RRSP from your TFSA (unless you need the money prior to your retirement!).