Does moving my TFSA to another bank use room?
Not as a direct transfer between the banks. Withdrawn and deposited by hand, the deposit is a new contribution: $20,000 moved that way in June costs $910.
Tax on a move by hand
$910
See how
Room before the move$7,000
Deposited at the new bank$20,000
Over the limit$13,000
Months over, June to December7 months
Tax at 1% a month$910
The withdrawal doesn’t help that year: it is room again only on 1 January. So the whole deposit counts against this year’s $7,000.
A direct transfer is one the new bank asks the old one for. Between your own TFSAs it changes nothing about your room, whatever the amount.
If it has already happened, withdrawing the excess stops the tax the month after; on 1 January the withdrawal is room again.
Sources
Checked against the CRA’s pages on .