Leaving Canada with an RRSP, TFSA or FHSA: what changes when you become a non-resident

You can keep your RRSP, RRIF, TFSA and FHSA after leaving Canada, and leaving does not trigger tax on them. But the rules change as soon as you become a non-resident for tax purposes: TFSA contributions while non-resident are taxed at 1% a month until withdrawn, and you earn no new TFSA room for full years abroad; RRSP and RRIF withdrawals are subject to 25% non-resident withholding (Part XIII tax), which a tax treaty may reduce for some periodic payments; and FHSA contributions and qualifying withdrawals require Canadian residence. Your new country of residence may also tax income inside these accounts, especially the TFSA, which many countries do not recognize.

This guide is part of the mistakes and official sources hub. Residency is a question of facts, and cross-border tax is complex; get advice in both countries before you go. General information only.

What changes, account by account

TFSA: stop contributing before you leave

• No new room accrues for any full calendar year you are non-resident. You do get room for the year you leave and the year you return.
• Contributions while non-resident are taxed at 1% a month on the contribution, until it is withdrawn or you become resident again. This applies even if you have unused room.
• Withdrawals are allowed and are not taxed in Canada, but the amount is added back to room only if you are resident again.
• Your new country may tax the TFSA's income annually, as an ordinary investment account or even as a foreign trust. For US tax purposes, a TFSA is generally not tax-exempt, and reporting obligations can be heavy.

Worked example

An illustrative software engineer moves to Germany in August 2026. They have $40,000 in a TFSA and $25,000 of unused room. In March 2027 they deposit $5,000, forgetting the rule. They withdraw it in October 2027. The CRA's TFSA guide says the month in which the full non-resident contribution is withdrawn is not taxed, so the tax runs for March to September: 7 months × 1% × $5,000 = $350, plus filing Form RC243. A partial withdrawal would not have reduced the tax; only withdrawing the whole $5,000 stops it. No new room accrues for 2027.

RRSP and RRIF: withholding and the treaty

• Lump-sum withdrawals by non-residents are subject to 25% withholding as Part XIII tax, which is usually the final Canadian tax on that income.
• Periodic payments (for example RRIF payments) may qualify for a reduced treaty rate in some countries; your institution needs Form NR301 to apply a treaty rate.
• Section 217 election: some non-residents can elect to file a Canadian return and be taxed at regular rates, which can produce a refund of part of the 25% when their total Canadian income is low. It is worth checking if most of your income is Canadian.
• The 10%, 20% and 30% resident rates and the Quebec rates in the withholding example no longer apply once you are non-resident.

Worked example

The same engineer withdraws $30,000 from their RRSP in 2028 while living in Germany. Withholding: 25% × $30,000 = $7,500; they receive $22,500. Germany may also tax the withdrawal, with a credit for Canadian tax under the treaty. The withholding calculator works with a 25% rate.

FHSA if you leave

You cannot contribute while non-resident, and a qualifying withdrawal requires that you be a Canadian resident from the time of withdrawal until the purchase. If you do not return, the main options are a transfer to your RRSP or RRIF before the account's deadline, or a taxable withdrawal with non-resident withholding. See FHSA account management.

Before you leave: a checklist

1. Make any last TFSA and FHSA contributions before your departure date, within your room.
2. Consider whether RRSP withdrawals are cheaper before you leave (at resident rates in a low-income year) or after (at 25%).
3. Tell each institution your new address and status; some cannot serve clients in certain countries and may restrict trading.
4. Get advice on how your new country treats each account.
5. Keep your Canadian bank account if possible, for withdrawals.
6. Review beneficiary designations, since your new country's estate rules may also apply.

Returning to Canada

When you become resident again, TFSA room accrues again from that year, and withdrawals made while abroad are added back on the following January 1. RRSP room from foreign income is not created, because earned income for RRSP purposes is Canadian-taxable income. Bring records of what happened in each account while away.

Quebec notes

Residence of Quebec for provincial tax follows similar principles. A Quebec resident leaving Canada stops being taxed by Quebec on the same basis; non-resident withholding is federal (25%), and Quebec withholding no longer applies once non-resident.

Frequently asked questions

Will the CRA close my TFSA when I leave?

No. You can keep it; you just cannot contribute without penalty.

Can I still contribute to my RRSP from abroad?

Only if you have unused room, and the deduction is useful only against Canadian-taxable income.

Do I owe Canadian tax on TFSA income while abroad?

No Canadian tax, but your country of residence may tax it.

How do I know if I am non-resident?

It depends on your residential ties (home, spouse, dependants) and other factors. The CRA can give an opinion through Form NR73.

Official sources

• Canada Revenue Agency — leaving Canada, Part XIII tax, Forms NR73, NR301 and the section 217 election
• Department of Finance Canada — Canada's tax treaties
• Revenu Québec — leaving Quebec and residency
• Financial Consumer Agency of Canada — managing accounts from abroad