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Dear Nancy,

I understand I can have an "in-kind" transfer of equities taken out as my minimum annual RIF withdrawal and then put into a TFSA. Can this be done directly, or is it necessary to temporarily transfer them into a "cash account" before the transfer into the TFSA can occur? What if the transfer is into my wife's TFSA?



Dear Kal,

You can withdraw your minimum annual RIF payment as an "in-kind" transfer. It would need to be moved to a cash account, but after that it is yours to do with as you please.

Any funds that are taken out of the RIF irrespective of where they are then moved to (including a TFSA), are taxable as income. If you choose to move the amount "in kind" or cash does not change the taxability either. You can transfer either to an investment account and then to a TFSA if you choose. Many people seem to be of the mind that they can transfer from an RSP or RIF to a TFSA and avoid the tax. This is not true, so be very careful if you're expecting not to pay tax on any funds whether "in-kind" or cash that are taken out of an RSP or RIF.

If you are only taking out the minimum required amount there is not any tax withheld by your financial institution. It will be included as taxable income for 2014 and the necessary tax, if any, is applied when your file your income tax return.

Note that if anyone withdraws more than the minimum amount from a RIF or deregisters "in-kind" from an RRSP, there is a withholding tax that needs to be paid at the time of withdrawal. Your financial institution can best advise you in this regard.

Nancy Woods is an associate portfolio manager and investment adviser with RBC Dominion Securities Inc. Visit her website or send an email request to You can send your questions to as well.