Key takeaways
- Keep your TFSA: interest, dividends, gains and withdrawals are not taxed in Canada while you are a non-resident
- Do not contribute while non-resident: you pay a 1% tax for each month the contribution stays in the account
- No new contribution room for any year you are non-resident for the whole year; the year you leave still gets the full $7,000 (2026)
- Money you withdraw while abroad is added back to your room only when you become a resident again
- Other countries, including the US, may tax your TFSA as an ordinary investment account
Who this guide is for
Who this page is for: TFSA holders who are leaving Canada, or who already live abroad and still have a TFSA. It also helps returning Canadians work out their room.
The TFSA is not hit by departure tax. It is a registered plan, so it is not deemed sold when you leave. See the departure tax guide for what is.
Can I keep my TFSA as a non-resident?
Yes. The CRA says non-residents may keep their TFSA. Any interest, dividends or capital gains earned in it are not taxed in Canada, and withdrawals are not taxed in Canada either. There is no non-resident withholding tax on TFSA withdrawals.
Tell your bank or brokerage that you are a non-resident. Some financial institutions do not let non-residents trade, or limit what you can buy in the account. Ask before you leave, so you are not forced to sell at a bad time.
What happens if I contribute while I am a non-resident?
You are allowed to make the contribution, but it is taxed. The CRA charges a 1% tax for each month the contribution stays in the account, until you withdraw it or become a resident again. You report it on a TFSA return (Form RC243) and pay it.
Example: you live in Australia and put $7,000 in your TFSA in March, then notice the mistake and take it out in December. The tax is about 1% × $7,000 = $70 for each month it stayed in the account, which can add up to several hundred dollars. If the contribution is also over your room, a separate 1% per month tax on the excess applies too.
Automatic monthly contributions are the most common trap. Cancel any pre-authorized TFSA deposits before your departure date.
How TFSA room works when you leave and come back
- Year you leave: you get the full annual limit if you were resident for part of the year. For 2026 that is $7,000.
- Full years abroad: no new room.
- Withdrawals while abroad: not added back to your room until you become a resident again.
- Year you return: you get that year’s full limit, plus the amounts you withdrew while abroad, plus any unused room from before you left.
The CRA example: Daniel became non-resident in September 2020, withdrew $5,000 in 2021 and $3,000 in 2024, and came back in 2025. In 2025 his room was the $7,000 limit plus the $8,000 he withdrew: $15,000.
Check your room on returning with the TFSA and RRSP over-contribution calculator.
Will my new country tax my TFSA?
Possibly. The “tax-free” part only applies to Canadian tax. Most countries do not recognise the TFSA, so they may tax the interest, dividends and gains each year as if it were a normal investment account.
- United States: the US does not treat the TFSA as tax-free. US residents and citizens generally report and pay US tax on its income, and extra US information forms may be needed. Many people moving to the US close their TFSA before becoming US tax residents. See moving to the US from Canada.
- India: income in a foreign account is generally taxable once you are a resident and ordinarily resident, and foreign assets must be disclosed. See moving back to India.
- Other countries: ask a local tax adviser before you leave. Also check whether holding Canadian mutual funds or ETFs causes special rules where you are going.
On the Canadian side, there is nothing to file for a TFSA you simply keep while abroad. You only file a TFSA return (Form RC243) if you owe tax, for example because you contributed while non-resident or went over your room. Keep your own record of withdrawals, because your institution may not track your residency.
Your other registered accounts
- RRSP and RRIF: you can keep them. Growth stays tax-deferred in Canada. Withdrawals face 25% non-resident withholding, or a lower treaty rate for some periodic payments. You can no longer build new RRSP room from foreign income. See the withholding tax calculator.
- First Home Savings Account (FHSA): you can keep it, but you cannot make a qualifying (tax-free) home withdrawal while non-resident. If you plan to buy a home in Canada soon, do it before you leave. Taxable withdrawals face 25% withholding.
- Home Buyers’ Plan: if you still owe RRSP money from the HBP, repay it within 60 days of leaving (or before you file your final return), or the balance is added to your income.
- RESP: rules for grants and withdrawals change when the student or subscriber is non-resident. Ask your RESP provider before you leave.
Keep, freeze or close: how to decide
| Option | When it makes sense |
|---|---|
| Keep it invested | Your new country does not tax it, or taxes it lightly, and your institution lets non-residents keep trading. |
| Keep it in cash or GICs | You plan to come back and want to keep the account simple and low-income. |
| Withdraw before you leave | Your new country would tax it each year and adds reporting. You lose nothing in Canada: the room comes back when you return. |
See the overall plan in our leaving Canada tax guide.
TFSA steps before your departure date
- Make your last contribution while you are still a resident, if you have room and it makes sense for your new country.
- Cancel automatic deposits so nothing lands after your departure date.
- Ask your institution if it allows non-resident accounts, trading and online access from abroad.
- Update your address and residency status with the institution, and keep a note of your departure date.
- Decide whether to keep, simplify or withdraw, based on your new country’s tax rules.
- Keep a record of any withdrawals you make while abroad. You will need the total when you come back, to work out your room.
Coming back later? The returning to Canada checklist covers TFSA room and the other steps.