RRSP transfers

You can transfer money between your RRSPs without triggering tax consequences. In certain situations, you can make other transfers to your RRSP, and between your RRSP and other registered plans.

Transfers between RRSPs

You can transfer cash and investments between RRSPs you hold at the same or different financial institutions. Tax will not be withheld if the transfer is made directly by the financial institution. One or both of the financial institutions involved may charge you a transfer fee.

Amounts you transfer directly to your RRSP do not affect your RRSP deduction limit.

You can’t transfer money from your RRSPRRSP See Registered Retirement Savings Plan.+ read full definition to the RRSP of someone else. This applies to any spousal RRSPs that you may be contributing to.

Transferring investments from a non-registered account to an RRSP

You can transfer investments, such as stocks or bonds, from a non-registered accountAccount An agreement you make with a financial institution to handle your money. You can set up an account for depositing and withdrawing, earning interest, borrowing, investing, etc.+ read full definition to your RRSP. This is called a transfer “in kind”. You might do this if you don’t have the cash to make your contributionContribution Money that you put into a savings or investment plan.+ read full definition, but you have investments that you want to use instead.

This has taxTax A fee the government charges on income, property, and sales. The money goes to finance government programs and other costs.+ read full definition consequences, however. You are considered to have sold your investments at their fair market valueMarket value The value of an investment on the statement date. The market value tells you what your investment is worth as at a certain date. Example: If you had 100 units and the price was $2 on the statement date, their market value would be $200.+ read full definition and will have to report any resulting gain on your tax return. You can claim an RRSP deduction equal to the fair market value of the investments transferred to your RRSP. If the fair market value results in a loss, in order to claim the loss on your tax return, you must first sell the investments and then contribute the cash proceeds to your RRSP.

Transferring a retiring allowance to an RRSP or RPP

You can transfer part of a retiring allowance to your RRSP or registered pension planRegistered Pension Plan A formal plan that provides benefits to you when you retire. Your employer puts money into the plan (and sometimes you do, too). You don’t pay tax on the money in your plan until you take it out.+ read full definition (RPPRPP See Registered Pension Plan.+ read full definition). Retiring allowances are paid on or after retirement by an employer in recognition of long service. The Canada Revenue Agency (CRA) has a formula, based on years of service, for determining how much is eligible to be transferred. Tax will not be withheld if the transfer is made directly. The transfer will not affect your RRSP deduction limitDeduction limit The most you can deduct for your RRSP contribution on your income tax return. Any money that you put into a pension plan at work counts as part of your RRSP contribution.+ read full definition.

Transfers between RRSPs and other registered plans

In certain situations, you can transfer funds from one registered plan to another without triggering tax consequences. For example:

  • From an RESPRESP See Registered Education Savings Plan.+ read full definition to an RRSP – If your child has an RESP and doesn’t continue with their post-secondary education, you can get your contributions back. You may be able to transfer up to $50,000 of the earnings on your contributions tax free to your RRSP or your spouse’s. You must have unused RRSP contribution roomContribution room The amount you can put into a savings plan like a Registered Retirement Savings Plan (RRSP). If you do not put the full amount into the plan each year, you will have extra, unused contribution room that you can use in later years. Example: Let’s say you can contribute $12,000 to your RRSP this year,…+ read full definition to do so. Learn more about these transfers.
  • From an RRSP to an RDSPRDSP See Registered Disability Savings Plan.+ read full definition – As of July 2011, if you are the parent or grandparent of a financially dependent infirm child or grandchild with an RDSP, you can arrange to have your RRSP transferred tax free to their RDSP when you die. Learn more about this type of transfer.

Key point

You can transfer funds between your RRSPs without paying tax as long as the transfer is made directly by the financial institution.

Last updated