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TFSA and Marital Breakdown

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RRSPs RRIFs and TFSAs  ->  Tax-free savings accounts (TFSAs) -> Marital breakdown

Tax-Free Savings Accounts (TFSAs) - Marital Breakdown or Divorce

TFSA transfers can be made directly to a former spouse or common-law partner's TFSA without affecting their contribution room, if

    - the individuals are living separate and apart at the time of the transfer, and

    - the transfer is made under a decree, order or judgment of a competent tribunal, or under a written separation agreement

The transfer is not considered a contribution, so does not reduce the contribution room of the recipient.

The transfer is not considered a withdrawal, so will not be added back to the contribution room of the transferor the following year.  The transfer will also not eliminate any excess amount in the TFSA.

Canada Revenue Agency (CRA) information:

    - RC4466 - Tax-Free Savings Account (TFSA), Guide for Individuals - see Chapter 5 Qualifying Transfers - Upon marriage or common-law partnership breakdown

Tax Tip:  Make sure your financial institution knows that this is a marital breakdown transfer, not a withdrawal and deposit.

Previous:

    - What is Better - TFSA or RRSP?

    - TFSA Contribution Rules and Limits

    - Don't Overcontribute!

    - Unused Contribution Room

    - TFSA Investments - qualified, non-qualified, and prohibited

    - TFSA Withdrawals

    - Asset Transfer (Swap) Transactions

    - Taxes Payable re TFSA

Next:

    - Death of the TFSA Holder

Back to TFSA main page.

Revised: October 27, 2017

 

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