Your TFSA and RRSP when moving abroad

TFSA: ownership and contributions are different

You can keep a TFSA after becoming a non-resident, and it remains exempt from Canadian tax on its income and withdrawals. Contributions made while non-resident generally attract a 1% monthly tax. You do not earn new contribution room for a full calendar year of non-residency. Do not recontribute a withdrawal while non-resident just because a new calendar year has begun. Check your available contribution room after you become a Canadian resident again.

Official reference: CRA: TFSA rules for non-residents

Check recurring transfers and automatic savings instructions, including small scheduled amounts. Record the date of your last contribution and retain statements. If you discover a contribution after your status changed, ask about the correction and reporting process promptly.

Ask a destination adviser how that country treats the account, its investments and its withdrawals. The name “Tax-Free Savings Account” describes Canadian treatment; it is not an international exemption.

RRSP: review withdrawals before moving money

RRSP interests are generally excluded from the departure deemed-disposition rules. Later payments to a non-resident can be subject to Canadian withholding. The usual Part XIII rate is 25%, with reductions possible under an applicable treaty. The payment type and your country of residence matter.

Official reference: CRA: dispositions of property for emigrants · CRA: non-residents of Canada

Request a written illustration for the payment you are considering. Specify whether it is a one-time withdrawal or a series of payments, the proposed date, your residence country and the amount before withholding. Ask the destination adviser to explain local reporting and any relief for Canadian tax.

Do not empty an account solely because a move is approaching. Compare the consequences of retaining it, withdrawing before departure and withdrawing afterward using your actual circumstances.

Ask your provider about service restrictions

An answer about an ordinary bank account may not cover a brokerage account. Obtain a response for each provider and product. Keep a dated copy and schedule any transfer early enough to resolve problems before departure.

Create a two-country account worksheet

Use one row per account, with these columns: owner, provider, account type, approximate value, automatic contributions, intended action, Canadian questions, destination questions and next review date. Use an account nickname or last four digits in a shared planning document.

If you also hold RESPs, FHSAs, pensions, stock options or company accounts, add separate rows. They need their own review; an RRSP answer should not be applied to another product.

Before you approve a transaction

• Confirm the residence assumptions used in both countries.
• Check the date and type of payment in the written calculation.
• Confirm the provider can carry out the requested transaction.
• Identify reporting forms and who will prepare them.
• Keep the final instruction and confirmation with your departure file.

Return to the departure checklist to connect these account decisions with your move date, asset inventory and filing calendar.