Death of a TFSA holder

After the holder of a TFSA dies, possible tax implications may vary somewhat depending on one or more of the following factors:

• the type of TFSA;
• the type of beneficiary(ies);
• whether any income was earned after the date of death; and
• how long, after the date of death, amounts are distributed to beneficiaries.

Depending on the factors that apply, the following can be affected:

• whether the deceased's TFSA continues to exist or is considered to have ceased;
• how income earned after the date of death may be reported and taxed; and
• whether a beneficiary can contribute amounts received to their own TFSA, within certain limits, and whether such a contribution would affect their unused TFSA contribution room.