How to reduce the tax hit when transferring non-registered assets

Do you have cash or investments in a non-registered taxable account, but also have RRSP or TFSA contribution room available? Before transferring an investment into a registered account (or selling and transferring it), compare your book value to your market value.* Capital gains may apply and if you’re not careful, losses may be denied.

Transferring cash into a registered account won’t trigger any tax; however, transferring stocks, mutual funds or other capital assets is considered a deemed disposition by the Canada Revenue Agency (CRA). It doesn’t matter whether you’ve sold the investment or not. Any amount exceeding your book value at the time of transfer is deemed to be a capital gain and subject to tax. If the market value is less than your book value, the CRA won’t allow you to claim a capital loss as you haven’t sold the asset. A loss may only be claimed if you sell your investment outright and don’t repurchase it for 30 days.

Limit your tax bill

If you have ready cash available it may be simpler to use it for your RRSP, TFSA or even RESP contribution, thereby eliminating the tax issue altogether. If that’s not an option, you should assess whether the tax benefits will outweigh the immediate tax consequences before transferring your assets.


  • Compare book and market values of each non-registered investment separately, estimating the capital gains or losses that would be triggered.
  • Identify any investments you want to sell or reduce your ownership in due to poor performance, high fees, percentage held or other reasons.
  • Rank investments by their potential to achieve future capital gains.


  • Prioritize transferring investments that will trigger the smallest capital gains.
  • Trigger a capital loss by selling an investment you no longer want to hold and use the proceeds for a cash contribution.
  • If the capital loss or gain triggered will be small and you want to hold the investment in a tax-sheltered account due to its future growth potential, consider making the transfer and either forego the loss or pay tax on the gain.
  • If the capital loss is substantial, consider triggering the loss, transferring the proceeds into the registered account and after 30 days repurchase the investment.
  • When assets with unrealized capital gains are transferred into an RRSP the resulting tax refund will offset the capital gains tax owing.
  • RESP contributions are topped up with free grant money from the federal government.

With a little planning, you can establish the most advantageous way to transfer assets into registered savings vehicles and become a more tax-efficient investor.

*Book value is the combined total of your initial purchase price, any distributions that were reinvested, and costs incurred to buy or sell the investment. Market value is what your investment is worth today.

Karen Hall designs and implements comprehensive financial education services uniquely suited to employees at many of Canada’s largest companies. She brings more than fifteen years of training, financial education program development and consulting experience to her role as Vice President, Financial Education & Employer Services at T.E. Wealth.

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These articles are for general informational purposes only. Please obtain professional advice before taking any action based on this information. No endorsement or approval of any third parties or their advice, information, products or services should be implied by any references to third parties contained in any article. Trademarks cited in these articles are the respective properties of their owners.

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