TFSA – RESIDENT IN CANADA?
In a March 22, 2018 Technical Interpretation (2018-0738201I7, Pietrow, Victor), CRA opined that all TFSAs are resident in Canada. Similarly, CRA opined that all RRSPs, RRIFs, RESPs and RDSPs are resident in Canada. They base this conclusion on the responsibilities of the trustee (e.g. the financial institution) under the terms of a trust required in order to be an eligible TFSA. These generally relate to monitoring and administering the trust to ensure compliance with the requirements of a TFSA.
The question was posed in the context of a self-directed TFSA which was reassessed on the basis it was carrying on a securities trading business. The TFSA holder was a non-resident of Canada for at least part of the period under audit. She argued that, as she made all the investment decisions, mind and management of the TFSA trust was outside Canada, making it non-resident and, therefore, the TFSA trust was not taxable in Canada on any business income earned during that period.
For further information see Video Tax News Monthly Tax Update Newsletter, Issue No. 446.