Q&A With Gordon Pape: Moving Funds From an RRSP to a TFSA

Investing advice

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The law says you can’t move money from an RRSP to a TFSA. But
here’s a way to do it.

Q – My wife has a stock portfolio in her RRSP. She retired this year at 55 years old. She has no TFSA holdings. Can she move $6,000 into her TFSA from her RRSP without eventually paying tax since she has no income, based on the $12,000 personal exemption of tax-free earnings?

I know she will pay a 20 per cent withholding tax right away, but she
will get that back and have $0.00 in taxes to pay, correct? – Martin H.

A – Yes, it appears this will work. As you say, the $6,000 withdrawn
from the RRSP will be subject to a 20 per cent withholding tax but that
will be recovered when she files her 2020 return. This assumes she has no income from other sources. – G.P.

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