TSFA Knowledge Based Certification Practice Test

Are transfers between TFSA and RRSP/RRIF tax-free?

Yes No Only if you have extra room Only if transferring to RRIF

Correct Answer:

Explanation:

Transferring funds directly between a TFSA and RRSP or RRIF isn’t tax-free. TFSA dollars have already benefited from tax-free growth, and RRSP/RRIF contributions are handled differently (they’re deductible and grow tax-deferred, with taxation on withdrawal). There isn’t a direct tax-free rollover from a TFSA into an RRSP or RRIF. If you want to move money, you’d typically withdraw from the TFSA (tax-free) and then contribute to the RRSP within your RRSP room, but that RRSP contribution would be handled separately for tax purposes and the TFSA withdrawal doesn’t create RRSP room.

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