See Also
Robitaille v. The Queen, 2019 TCC 200 (Informal Procedure)
The taxpayer, as a result of tapping the wrong icon on an ATM machine, inadvertently deposited $40,000 to his TFSA rather than his chequing account. He did not discover this until the overcontribution was drawn to his attention by a CRA agent almost a year later, at which point he immediately withdrew the $40,000. He had in a previous year made a $5,000 over-contribution, so that CRA did not provide any relief this time around.
After finding that the Minister’s assessment of tax under s. 207.07(1)(b) was correct, Spiro J stated (at paras. 28-30):
In enacting subsection 207.06(1) of the Act, Parliament anticipated that there would be situations in which tax on an “excess TFSA amount” would be payable, but where, in light of all the circumstances, the liability should be waived (before assessment) or cancelled (after assessment) by the Minister.
[I]t is not within this Court’s jurisdiction to order the Minister to exercise her discretion to cancel the tax assessed. …
Should the Minister decide to exercise her discretion under subsection 207.06(1) of the Act to cancel the Appellant’s liability in respect of the inadvertent deposit of $40,000 to his TFSA on the night of July 21, 2016, such cancellation would find ample support on the extraordinary facts of this case.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 207.06 - Subsection 207.06(1) | relief would be justified for inadvertent overcontribution | 153 |
Administrative Policy
15 June 2021 STEP Roundtable Q. 11, 2021-0883221C6 - excess TFSA amount
A new resident of Canada contributed $18,000 to a new TFSA in 2021 due to a misunderstanding of the rules (his contribution room was only $6,000). The shares of the company in which the TFSA invested became worthless.
CRA indicated that the monthly 1% tax under s. 207.03 on the excess amount continues to apply for each month that the excess amount remains and that, as here, the excess TFSA amount cannot be withdrawn, the excess will not be fully eliminated until January 1, 2023 as a result of the new contribution limits for 2022 and 2023.
The potential waiver of tax under s. 207.06(1) requires, inter alia, that he withdraw an amount from his TFSA sufficient to eliminate both the excess TFSA amount and any associated income and capital gains. Again, the individual cannot meet this condition.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 207.06 - Subsection 207.06(1) | CRA cannot waive tax for an innocent TFSA overcontribution where the investments become worthless | 182 |
14 July 2020 External T.I. 2020-0843071E5 - TFSA - Deliberate Over-contributions
CRA confirmed that there is no requirement to remove any income or capital gains that are attributable to an excess TFSA amount, except where the 1% tax is waived under s. 207.06(1) or in where there has been a “deliberate over-contribution” as defined in s. 207.01(1).
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 207.01 - Subsection 207.01(1) - Deliberate Over-Contribution | restrictive paraphrase provided of the deliberate over-contribution definition | 316 |
11 September 2015 Internal T.I. 2015-0599851I7 - TFSA arbitrary assessment
CRA is proposing to streamline its procedures so that any taxpayer who, having failed to remove an excess contribution from his or her TFSA following a warning letter from CRA, will be subject to an automatic assessment of tax on the excess contribution without further warning.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 152 - Subsection 152(7) | TFSA holder can be assessed without being contacted | 137 |