Breton - Federal Court finds that failing due to ignorance to transfer funds between the taxpayer’s TFSAs using the qualifying transfer rules, was not a “reasonable error”

The taxpayer accomplished the transfer of the TFSA that he held with Caisse Desjardins to the one held with Banque Nationale by withdrawing the funds from the first TFSA and depositing then to the second TFSA, rather than arranging for Caisse Desjardins to transfer the funds directly as a “qualifying transfer” as defined in s. 207.01(1) (i.e., on a tax-free basis). In finding that the CRA decision to deny his request for relief pursuant to s. 207.06(1) was reasonable, and after having noted that the taxpayer had failed to request a direct transfer “since he was unaware of the obligation to do so,” Régimbald J stated:

The jurisprudence clearly demonstrates that ignorance of the provisions of the ITA and of the obligations of taxpayers in managing their TFSA accounts … do not constitute a "reasonable error" within the meaning of subsection 207.06(1), justifying the exercise of the Minister's discretion … .

Neal Armstrong. Summary of Breton v. Attorney General, 2024 CF 555 under s. 207.06(1).