A withdrawal and an immediate replacement plan
A resident client has used all available TFSA contribution room according to verified records. In the middle of the year, the client makes an ordinary withdrawal for a temporary expense. A few weeks later the money becomes available again, and the client wants to deposit it into a TFSA at another institution. The client believes that a different issuer provides a fresh independent limit and that the withdrawal restored room immediately. There is no other unused room in the scenario and no direct qualifying transfer is being processed. The representative can review current CRA guidance before taking any action. Both institutions can provide transaction histories for the relevant year.
1. Which assumptions need correction?
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Multiple issuers do not create separate full personal limits, and an ordinary withdrawal generally adds room the next calendar year rather than immediately. With no other room in the scenario, an immediate redeposit can create an excess contribution.
2. How should the explanation distinguish an actual transfer?
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Explain that an appropriately processed qualifying direct transfer is a different transaction from a personal withdrawal and new contribution. Verify the actual records and process; calling a completed withdrawal a transfer does not automatically change its consequences.