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Will my spouse have to pay tax on my TFSA after I die?

Nancy Woods, adviser with RBC

Deborah Baic/The Globe and Mail

Dear Nancy Woods,

I have been contributing the maximum amount to my TFSA and my wife's. With good investment picks I have been able to make them grow substantially. I am quite a bit older than her and my assumption is that I will pre-decease her. What will happen to my TFSA when I pass on? I know it will pass on to her as a successor annuitant, but what happens when or if she withdraws those funds?  Will she be taxed on the portion that came from me? Signed Oliver

Dear Oliver,

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As long as you are living in a province that allows the assignment of a successor annuitant to your TFSA and you have signed the necessary documents, your TFSA will pass to your wife in its entirety without any taxation. Once it is in her name the total amount carries on as her tax-free TFSA. Even if she withdraws any portion or all of it, it will not incur any tax liability.

So, for example, you each have contributed $20,000 and the growth has been $5,000.  The total value of each of your TFSAs is now $25,000.  Your TFSA passes to your wife and now the value of her TFSA is $50,000.  She has essentially doubled her TFSA and it will continue to grow and earn income tax free. When she withdraws funds or it passes to her estate it will do so without tax.


Nancy Woods, CIM, FCSI, is an associate portfolio manager and investment adviser with RBC Dominion Securities Inc. To ask her a question, send an e-mail to or visit her web site at


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