Split of Shares in TFSA & Margin (Cash) Account

Hi Guys,

In past I have bought same company share (Example: RY) partially in TFSA and balance in Margin (CAD cash) account.
And this was purely done due to lack of TFSA limit and I still wanted to buy more of the same shares.
Does this limit anything or has any consequences in future when I decide to trade these shares?

What would be your suggestion if my TFSA & RRSP limits are over and I still would like to add more funds/shares, what is the right way to go about it?

Once I have used my TFSA/RRSP limits and when I get dividend in these accounts and those accumulated dividend funds either sit under the same account or I use those funds in buying shares within TFSA/RRSP account, does this attract any tax liability or I don’t pay tax till I withdraw from RRSP account any funds?

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Asked on December 11, 2020 12:12 am

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Private answer

Hi Shail,

Not sure I am fully understading but let me five this a shot.

Question 1: Holding the same stock in two different accounts has no bearing or no impact other than the impacts associate with that account. What you can't do, is cross trade between your accounts. For example say you have 10 RY shares in both, you can't sell 12 in your TFSA.
Question 2: If you are at your TFSA and RRSP limits and you want to add shares with new cash, than you will have to contribute to your Margin account. Do NOT overcontribute to your TFSA or RRSP as there are steep penalties. You can always sell existing positions within your TFSA for example, and then use that cash to by more RY shares as an example. But do not put new money in.
Question 3: Any dividend/distribution or capital gains from stock sells within your TFSA or RRSP are tax free. There are no tax consequences here. As you pointed out, one you withdraw from RRSP you will, but until then - no tax implications.

I believe I've answered your questions - let me know if you still need clarification.

Mat

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Posted by Mathieu Litalien

Answered on December 11, 2020 4:49 am

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