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Email this4:41 pm
April 16, 2020
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We did in-kind(*) transfers of some mutual fund accounts from one financial services company (A) to another (B). FSC-A charged transfer-out fees (in addition to the annual account admin fees) because they're losing the ongoing benefit of the annual account admin fees. FSC-B didn't offer (and/or we didn't think to ask) to reimburse us for the cost of the transfer-out fees.
(*) I don't think the process involves wired transfers between FSC-A and FSC-B. To my understanding, it's purely administrative, mostly updating the "nominee/intermediary" account details at the MF companies themselves.
I believe the annual account admin fees are indeed deductible. My question is about the transfer-out fees.
4:59 pm
October 27, 2013
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I would doubt it very much. It was not an investment expense. You didn't have to transfer out in the first place.
5:08 pm
April 16, 2020
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Well, it is an expense incurred "to manage or take care of your investments".
But yes, I understand the doubt that it would be deductible; just wondering if there is an explicit statement somewhere, thx.
5:49 pm
October 21, 2013
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I don't think it will work either but I can't quote chapter and verse They got rid of "carrying charges" and safety deposit box fees as deductions a few years ago if I remember correctly. Nowadays, it's all about non-refundable tax credits; very little can be deducted other than RSP contributions. The trend is against you.
6:15 pm
October 27, 2013
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pcs said
Well, it is an expense incurred "to manage or take care of your investments".
But yes, I understand the doubt that it would be deductible; just wondering if there is an explicit statement somewhere, thx.
Certainly not for registered accounts regardless of questioning it for non-registered accounts.
6:34 pm
September 11, 2013
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They're probably not deductible but I agree, you could say transfer out fees are to "manage or take care" of your investments. I'd deduct, all they can do is knock them out. (I'm guessing they're not deductible only because I haven't seen anything anywhere that specifically says they are.)
Lesson learned: Always ask (they won't offer) your new FI if they'll reimburse you any transfer, close-out, etc fees levied by your old FI. In the handful of times I've done this I've never been turned down, though they usually waited to reimburse me once I provided them with the evidence (i.e. last statement) of the fee charged and paid. If I remember right I forgot to ask once and then phoned the guy back and asked while the investments were in transit, and they still agreed.
8:34 pm
April 6, 2013
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I would say transfer fees for non-registered investments would be carrying charges. Transferring the investments is moving or carrying them from one financial institution to another.
Carrying charges are still deductible, except for safety deposit box fees.
IT-238R2 Fees Paid to Investment Counsel suggests such transfer fees would be deductible under Income Tax Act 20 (1)(bb):
1. Paragraph 20(1)(bb) allows a taxpayer to deduct fees, other than commissions, paid for … or for the administration or the management of the shares or securities of the taxpayer. The fees must be paid to a person whose principal business is … or whose principal business includes the administration or management of shares or securities. A person is defined in subsection 248(1) to include any body corporate and politic.
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