The December Manoeuver question | Page 4 | Tax Free Savings Accounts | Discussion forum

Norman1 said
As well, financial institutions don't allow transactions for a day to be submitted up to 11:59:59 pm that day.

Some will cut the business day off as early as 6 pm.

This year, December 31 is a Saturday and not a business day. So, one can't complete a 2022 TFSA withdrawal even in the morning of December 31.  

All financial institutions that I'm dealing with allow instant transactions for a day to be submitted between all accounts at that particular institution including TFSA.

Some financial institutions also allow the same day transfers to and from another financial institutions.

And some financial institutions require to initiate inter institutions transfers 1 business day ahead.

For example. I can transfer money from my TFSA account to my regular savings or checking account at the same institution at 11:55 pm December 31 and it will be posted as December 31 transaction or de-registration if you want to call that de-registration. I tried that many times, it works perfectly.

For TFSA, it is important for CRA to know the in/out amount too because it is required to calculate the size of one's tax-free shelter.

( The size of my tax-free shelter is the sum of my total TFSA balance(s) & my available contribution room ) ... NVM if you don't know what I am talking about Shouldn't going further here

hwyc, please look at my post #62 above, where I also mentioned, that TFSA in/out dates and TFSA limits important.

If you are talking about TFSA over contribution penalty as a "the tax treatment", that is another issue and that only for people, who do not follow the TFSA rules.

Anyways, If I don't know, what you are talking about, I can't comment on that.

You said "Winne, I'm afraid I'll have to disagree on your comments. "

I don't understand why, so I replied.

I agree, that TFSA and PPRS are categorized as registered accounts.

Bill said
I never do this last-minute stuff but I thought after today FI's are dating everything as of the next business day, Jan 3 in Ontario, is that not the case for all of them anymore?  

That is the risk of doing it after today. I have seen anecdotal comments in past years in various places about folks being caught off-guard on that issue, i.e. transactions being posted the next business day. It makes no sense to me to 'stand in front of a bulldozer' and risk an unpredictable result....for the sake of a day or two trying to be cute.

Today is still 2022 so a withdrawal that happens today is fine, if it happens overnight tonight it could be dated Jan 3 2023.

Obviously if you transact after daily cutoff time (if the FI has one) you're into the next business day. TD site says, re cutoff times: "Most bank deposits are processed on business days (Monday–Friday), and all have daily cut-off times to validate deposits for that business day. Looking at your bank’s policies can be helpful here.............."

Loonie said
I wouldn't risk this in the last 3 business days of the year.
Start early!  

Well, I dunno. I think I'm with Winnie on this. Did the maneuver yesterday morning at two FIs. Instantly showed up in both...I have an electronic record of the transaction, and TFSA immediately showed up empty (actually $5 left in to keep it active) and regular HISA immediately showed up with the balance. Also seems to me I did this about three years ago, on the 31st, and there was some question from CRA, and the FI went to bat for me, basically told CRA it was in fact done on the 31st and provided them with the proof. Keep in mind, my experience is only with moving TFSA money to HISA, not transferring a TFSA, etc., or doing any other type of transaction.

lifeonanisland said

… Also seems to me I did this about three years ago, on the 31st, and there was some question from CRA, and the FI went to bat for me, basically told CRA it was in fact done on the 31st and provided them with the proof.…

You've disproved both your own and Winnie's argument.

Your withdrawal was not reported to CRA as effective December 31 but as effective January the next year. How else would CRA know?

The financial institution then had to convince CRA the withdrawal actually did occur on December 31 in spite of what their submitted TFSA return showed.