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Thread: TFSA/Royal Bank/ CRA problem.
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Fri, Jul 28th, 2017, 09:03 PM #1Expired on: Mon, Jan 1st, 2018
Royal Bank bought Ally bank in 2013 and does not know how to report correctly to CRA transfer of my TFSA account. I withdrawn money from Royal bank and deposited again next year in another bank according to contribution’s limit. I got a letter from CRA about over contribution. Royal bank does not have a clue how to correct it, CRA does not respond to my letter. What should I do?
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Fri, Jul 28th, 2017, 11:34 PM #2
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You are going to be stuck with a tax problem (due to over contribution) unless the matter is resolved.
So your TFSA was originally with RBC and you transferred it to the other bank?
https://www.canada.ca/en/revenue-age...explained.html
Did you letter address these items that the CRA requires in relation to excess contributions?
Waiver of the TFSA excess contribution tax
If you determined that you must pay a tax on your TFSA excess contributions, you may ask in writing that the CRA waive the tax if:
- your excess contributions on which the tax is based arose due to a reasonable error; and
- you are taking, or have taken, reasonable steps to eliminate the excess contributions.
To consider your request, we will need a letter from you that explains:
- why you made excess contributions and why this is a reasonable error; and
- what steps you have taken to eliminate the excess contributions.
All supporting documents should be included with your letter, such as copies of your TFSA account statements that identify the date you withdrew your excess contributions, as well as any other correspondence that shows that your excess contributions arose due to a reasonable error.
For more information on relief from the assessment of late-filing penalties and interest, see Information Circular IC07-1, Taxpayer Relief Provisions.
I saw this item and think it applies as you took out money from one bank to put into another bank. That means it was not a direct transfer between banks. Could be the reason why you got CRA's attention>the transfer affects contribution room. Remember, TFSAs are not like RRSPs. You can only contribute to TFSA up to your annual limit. If you do a withdrawal in the year, you don't get your contribution limit increased by the withdrawal amount-that contribution room was already used for the tax year.
https://www.canada.ca/en/revenue-age...our-tfsas.html
Ah-for each month the excess amount is in the TFSA, there is an penalty charge. See if you can resolve the matter by July 31 so you don't pay penalty for August!Last edited by Ciel; Fri, Jul 28th, 2017 at 11:37 PM.
2021-Bring on the sunshine, sweets & online shopping.
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Sat, Jul 29th, 2017, 08:39 AM #3
Hi,
Thank for the answer.
Some explanation:
Royal bank took over Ally Bank (Resmor Trust Company) in 2013 and did not report correctly the transfer of TFSA to CRA and until today is not able to fix it. I withdrew the TFSA money from RB in 2015, but CRA rejected the withdrawal record because does not know how the money came to RB. All the records, sent by RB are rejected by CRA.
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