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Email this4:38 am
October 5, 2017
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Norman1 said
Any required tax withholding on RRSP/RRIF withdrawals is considered to be tax withheld at source. So, the tax withheld has to be cash and be taken out of the withdrawal and not taken from another source.If one wishes to withdraw an investment from a RRIF in-kind, valued above the RRIF minimum, then the withdrawal has to include some cash for the required source tax withholding.
RSP withdrawals - withholding tax must be available as cash
RRIF withdrawals - any amount above minimum withdrawal amount ,
withholding tax must be available as cash and this would
include multiple withdrawals
At TD the 90 day rule may apply on either of the above account types as to the percentage tax withheld.
7:20 pm
November 18, 2017
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Okay, we're talking in crossed definitions.
Norman1:
So, the tax withheld has to be cash and be taken out of the withdrawal and not taken from another source.
I interpret "withdrawal funds in cash" as asking for new incoming cash from the depositor before withdrawals can be made. This would be nuts and end up with too much being withdrawn.
I interpret funds witheld from a withdrawal as witheld funds, not "cash" funds. In fact, they are not cash, but tax remittance credits. That's what every document and rep I've encountered has meant and confirmed. And I have experiences in this, having emptied my RRSPs over the years.
If we were talking about witheld funds as "cash," what alternative could possibly be "not cash?"
RetirEd
8:55 am
October 30, 2023
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bhuc said
On withdrawals, at least with TD, they want the withholding tax as cash .
So it might make a difference to if its 10% or 20% or 30% cash required.
One might have to sell some equities for cash to cover the withholding tax.
@bhuc
Can you verify that policy and the complete wording of it?
10:03 am
April 6, 2013
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RetirEd said
…
I interpret "withdrawal funds in cash" as asking for new incoming cash from the depositor before withdrawals can be made. This would be nuts and end up with too much being withdrawn.I interpret funds witheld from a withdrawal as witheld funds, not "cash" funds. In fact, they are not cash, but tax remittance credits. That's what every document and rep I've encountered has meant and confirmed. And I have experiences in this, having emptied my RRSPs over the years.
That's incorrect.
CRA has always required taxes withheld or taxes owing to be sent to them as cash. CRA does not accept taxes withheld or taxes owing sent to them in shares, mutual fund units, Government of Canada bonds, cars, or any other assets.
If we were talking about witheld funds as "cash," what alternative could possibly be "not cash?"
With a trusteed RRSP/RRIF/TFSA, like the registered accounts from BMO InvestorLine, one can withdraw holdings in kind. One can withdraw the shares, mutual funds units, or bonds without first selling them.
One can also contribute in kind as well to a trusteed registered account. Instead of contributing cash to my Scotia iTRADE RRSP, I transferred some shares I had in a non-registered iTRADE account to the RRSP account. A "Contribution was, in whole or in part, in kind " box on the RRSP contribution receipt is ticked to indicate an in-kind contribution was made.
12:00 pm
November 18, 2017
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We're still talking about the same thing in different ways. The Registered plan would remit the witheld amount in a transfer of funds. Of course no other assets would be received by CRA unless in a seizure. Where you left me confused was saying "cash" as in physical cash or a payment from the taxpayer. Let's not belabour the point.
RetirEd
12:20 pm
October 21, 2013
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I don't want to belabour it but "cash" is the same stuff with which you pay all the rest of what you owe CRA every year. We all know there are no alternatives there.
5:30 am
October 5, 2017
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serendipity said
@bhuc
Can you verify that policy and the complete wording of it?
To @Serendipity
If you are a TD Webbroker customer, a call to a CSR can confirm the withdrawals details from RSP / RRIF including withholding taxes due CRA.
7:46 am
November 4, 2023
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Hi @lifeonanisland, I am not 65 yet but had a GIC mature in an RRSP and transferred it with the full amount plus interest to a RRSP savings account at Simplii. So my experience is at Simplii, they didn't take any withholding tax, not sure at Oaken. Have you tried calling them about this?
10:33 am
September 24, 2019
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DavidSan said
Hi @lifeonanisland, I am not 65 yet but had a GIC mature in an RRSP and transferred it with the full amount plus interest to a RRSP savings account at Simplii. So my experience is at Simplii, they didn't take any withholding tax, not sure at Oaken. Have you tried calling them about this?
What? Why would they?
11:30 am
November 22, 2023
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DavidSan said
Hi @lifeonanisland, I am not 65 yet but had a GIC mature in an RRSP and transferred it with the full amount plus interest to a RRSP savings account at Simplii. So my experience is at Simplii, they didn't take any withholding tax, not sure at Oaken. Have you tried calling them about this?
If you're transferring an RRSP from one FI to another there is no withholding tax deducted, because there is no withdrawal. It is still in the RRSP shelter.
Only when you withdraw funds out of that shelter is it subject to withholding tax (which is just the FI sending some $ to the CRA on your behalf -- it'll either reduce your tax balance owing or increase your tax refund; it is not a penalty).
12:15 pm
April 15, 2015
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I just cashed in a small Tangerine RRSP worth 3000$ & had it transferred into my reg savings account.They withheld 10% of the rrsp & 2700$ was deposited into reg savings.
2:31 pm
November 4, 2023
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Itellyouwutt said
If you're transferring an RRSP from one FI to another there is no withholding tax deducted, because there is no withdrawal. It is still in the RRSP shelter.
Only when you withdraw funds out of that shelter is it subject to withholding tax (which is just the FI sending some $ to the CRA on your behalf -- it'll either reduce your tax balance owing or increase your tax refund; it is not a penalty).
Your rite and I did not read OP's post properly (im younger so the attention span is shorter nowadays). After the GIC matures and transfers into a future Oaken RRSP savings account, then withdrawing from there would be subject to withholding tax. Thanks guys for clarifying
4:09 pm
November 22, 2023
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DavidSan said
Your rite and I did not read OP's post properly (im younger so the attention span is shorter nowadays). After the GIC matures and transfers into a future Oaken RRSP savings account, then withdrawing from there would be subject to withholding tax. Thanks guys for clarifying
lol -- attention span does not get better as you get older, let me assure you 
But this discussion raises an important point IMO -- some people it seems (not you or anyone here) do not understand the implications of withdrawing from their RRSP. There seem to be 2 misunderstandings.
The first is that for some people the withholding tax is not going to cover their total tax obligation. For example, they withdraw $20,000, the bank remits 20% to the CRA on their behalf ($4000), but when they file they owe 26% (provincial + federal) based on their tax bracket. So they have to fork over another 6% or $1200 in tax.
The second -- and it seems more confusing -- thing for some people, is that once they withdraw from an RRSP they permanently lose that contribution room. It's not like a TFSA where you get 100% of it back the following calendar year, whether it was $100 or $100,000. Once you let air out of the RRSP balloon, it never goes back in.
I know everyone here understands this inside and out...but this site is not representative of the general pop as far as I can see. More people are choosing to manage their own RRSP contracts vs. do it at their bank (or use 'mom and dad's guy') and so the likelihood of ignoring website warnings and disclaimers is relatively higher. It's different if a human being is saying "are you absolutely sure you want to do this?" vs. some pop-up window that looks like terms and conditions for an app that was just downloaded (which nobody reads).
Please write your comments in the forum.