Refund of taxes paid

The TFSA holder may be entitled to a refund of the one-time 50% tax paid on non-qualified investments or prohibited investments held in the TFSA before the end of the calendar year following the calendar year in which the liability for the tax arose, or a later time as permitted by the Minister, if either:

• the TFSA trust disposes of the non-qualified or prohibited investment; or
• the property ceases to be a non-qualified or prohibited investment.

Under unusual circumstances, the Minister may still consider refunding the tax if the disposition takes place at a later time. However, no refund will be issued if it is reasonable to expect that the holder knew, or should have known, at the time the property was obtained by the TFSA trust, that the property was, or would become, a non-qualified investment or a prohibited investment.

Claiming a refund

To claim a refund, send a letter explaining why you are requesting a refund along with the documents detailing the information relating to the acquisition of the non-qualified or prohibited property, or of its becoming non-qualified or prohibited, and of its disposition. The documents must contain the name and description of the property, the number of shares or units, the date the property was acquired or became non-qualified or prohibited property and the date of the disposition or the date that the property became qualified or ceased to be prohibited.

If the disposition took place in the same year as the acquisition, enter the refundable amount on the line in Section 2 of the TFSA return, and attach the documents to your return. If the property disposed of was acquired in a previous year, send a letter and the documents to:

Canada Revenue Agency
TFSA Processing Unit
Post Office Box 9768 Station T
Ottawa ON K1G 3X9

Related links

• Tax payable on non-qualified investments
• Tax payable on prohibited investments
  

Date modified:

2016-11-24