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CRA cracking down on manipulation of TFSAs

CRA cracking down on manipulation of TFSAs

The CRA is cracking down on aggressive manipulation of TFSAs and all other registered plans

Source: Financial Post
Author: Jamie Golombek

As Canadians, we sure do love our TFSAs. The ability to earn tax-free investment income and gains for life, coupled with the flexibility to withdraw funds, tax-free, at any time and for any purpose and then recontribute the amounts withdrawn in a subsequent year, make these savings vehicles a favourite choice among millions of taxpayers.

But, unfortunately, it seems the temptation to manipulate the completely tax-free nature of TFSAs is too great for some, which is why there are several anti-avoidance rules in the Income Tax Act to prevent abuse and manipulation of all registered plans, including not only TFSAs, but also RRSPs, RRIFs, RESPs and RDSPs.

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