Can I Transfer My RSP or TFSA Without Tax Consequences?

Written by Joe Snyder

Wednesday, September 27th, 2017

Q: Can I transfer my RSP or TFSA without tax consequences?

A: Yes, you can!

You can move registered accounts like RSPs and TFSAs from one financial institution to another by completing a transfer form specifically designed for this purpose. This Canada Revenue Agency (CRA) form, called a T2033, ensures the funds remain registered, meaning there are no tax implications. In essence, the T2033 means you're not withdrawing from your account and then re-contributing to another – which would have tax consequences. Instead, the T2033 keeps the transferred funds sheltered from any tax implications.

How It Works

If you're investing with Company A and decide you're going to move some or all of your registered funds to Company B, how do you go about doing this? Here are the steps you'd take:

1. Begin by opening the registered account with Company B.

2. Let Company B know that you want to transfer funds into your new account from an external account of the same account type (e.g. RSP at Company A to RSP at Company B) - Note: the T2033 form itself may even be part of the account opening process, as opposed to something you need to seek out.

3. Complete the T2033 and send it to Company B. Company B will in turn submit that form to Company A. Company A receives the T2033, processes it, and sends the proceeds to Company B.

How Long It Takes

Because of the multiple steps noted above, registered transfers usually take a few weeks. For example, if Company A needs to sell securities you hold in your registered account with them, then that needs to be taken into account as well, since there are trade dates, settlement dates, etc. that add time to the actual processing of the request.

Fees

There are almost always fees to transfer registered funds out of a financial institution. The reason why they charge transfer fees is because of the cost of (a) administering registered accounts, and (b) processing the transfer as noted above, which is very manual work and can be time consuming. Any transfer fees associated with processing a T2033 are essentially there to recover these costs. Registered accounts require tax reporting, for example – both to you the client and to the CRA. Contributions, withdrawals, transfers – all of these are reported to the CRA.

Exceptions and Other Things to Keep in Mind

The biggest exception to the above process is in the event the account you're trying to transfer is a pension or a locked-in account. If so, the institution you're transferring it to will likely have a locked-in agreement you'll need to complete. As well, the T2033 form may be replaced with a different transfer form, specifically used for locked-in accounts, called a T2151. The financial institution you're transferring to can help you determine if this applies to your situation.

If you have a question Joe can answer in a future article or a topic suggestion, please email it to: askanadvisor@tangerine.ca

Share now

Our new Global ETF Portfolios have now hit the market. Learn about the features of our new Global ETF Portfolios.

For Simplified Investing, Check Out Our Low-Cost Tangerine Investment Funds.

Related posts

My Early and Costly RSP Mistake
My Early and Costly RSP Mistake
May 11th, 2021 | Kelley Keehn
Investing Doesn't Have to be Complicated
Investing Doesn't Have to be Complicated
May 6th, 2021 | Preet Banerjee
I Made My RSP Contribution. Now What?
I Made My RSP Contribution. Now What?
April 27th, 2021 | Joe Snyder
Legal Stuff
This article or video (the “Content”), as applicable, is provided by independent third parties that are not affiliated with Tangerine Bank or any of its affiliates. Tangerine Bank and its affiliates neither endorse or approve nor are liable for any third party Content, or investment or financial loss arising from any use of such Content.
The Content is provided for general information and educational purposes only, is not intended to be relied upon as, or provide, personal financial, tax or investment advice and does not take into account the specific objectives, personal, financial, legal or tax situation, or particular circumstances and needs of any specific person. No information contained in the Content constitutes, or should be construed as, a recommendation, offer or solicitation by Tangerine to buy, hold or sell any security, financial product or instrument discussed therein or to follow any particular investment or financial strategy. In making your financial and investment decisions, you will consult with and rely upon your own advisors and will seek your own professional advice regarding the appropriateness of implementing strategies before taking action. Any information, data, opinions, views, advice, recommendations or other content provided by any third party are solely those of such third party and not of Tangerine Bank or its affiliates, and Tangerine Bank and its affiliates accept no liability in respect thereof and do not guarantee the accuracy or reliability of any information in the third party Content. Any information contained in the Content, including information related to interest rates, market conditions, tax rules, and other investment factors, is subject to change without notice, and neither Tangerine Bank nor its affiliates are responsible for updating this information.
Tangerine Investment Funds are managed by Tangerine Investment Management Inc. and are only available by opening an Investment Fund Account with Tangerine Investment Funds Limited. These firms are wholly owned subsidiaries of Tangerine Bank. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.