You can request to transfer your investments out of your FHSA by logging in, then heading to the Requests -> Transfer Investments page.
Please explore the sections in the article above to learn more about any potential tax implications of transferring investments out of your FHSA. This will depend on the specific account type you’re transferring to, and whether the transfer is considered
taxable income.
If the transfer is considered a taxable event, you will also be charged withholding taxes on the gross amount of the fair market value of the investments. This is charged to the cash balance in your FHSA.
Because Questrade does not sell your investments during this type of request, you are required to have the cash balance available in your FHSA account to cover the withholding tax.
When you transfer investments out of an FHSA, you have a few choices as to which market value is represented, depending on the type of investment. This will affect what price we are using, and how much withholding taxes will be applied. Please ask your
accountant or tax provider to assist you in choosing which available price is best for your personal tax situation.
If withholding taxes do not apply, such as for an FHSA to FHSA transfer, or an FHSA to RRSP transfer, you can skip this section.
Type of investment | |
|---|
| Stocks, Options and ETFs | High of the day, low of the day, or closing price on date of request |
| Mutual Funds | Closing price on date of request |
| Bonds | Closing price on date of request |
| Physical Gold/Silver | End of day price from the previous business day (Approximately 5:15 pm ET) |
To indicate which price you’d like Questrade to use for determining your transfer amount, you can leave a comment on the request after it has been placed.
Simply click the “Request history” tab, and click “Add comment” for the request indicating which price you’re using.
Let’s see an example
You request to transfer 50 shares of an American stock out of your FHSA into a Margin account. On the date of the request the stock’s closing price is $100, and you choose to use the closing price to represent the net market value
of $5,000 USD.
Because withholding taxes apply to the gross amount of a transfer, this net amount must be “grossed up” so that you can receive the full net amount you requested.
When the transfer takes place, you need to have the cash available for the withholding taxes in the FHSA account the shares are originating from. The withholding tax is paid in the currency of the request, however if you don’t have the available
cash in the currency of transfer, we can convert on your behalf.
The net amount of $5,000 USD falls into the 20% withholding tier (for a non-Quebec resident), therefore the gross withdrawal amount equals ($5000 / 0.8) = $6,250.
Therefore, the amount of cash necessary in the FHSA to cover the withholding taxes would be the difference between the gross and the net at $1,250 USD (or the CAD-equivalent).
After the shares have transferred, they will be shown in the Margin account with a new adjusted cost basis that equals the market value of the investment, not your original purchase price.
Because the gross amount of $6,250 USD was not a qualifying withdrawal from the FHSA, this will be added to your total income for the tax year it is transferred in. This is represented in the CAD-equivalent on your relevant tax slips
for reporting purposes.
Please note that this withholding tax may or may not completely cover any potential future taxes arising from the income inclusion; this depends on your total overall level of taxable income and other factors like deductions, credits,
and etc.
Please check with a tax professional about your specific circumstances, or if you have any questions about the tax implications of a non-qualifying FHSA transfer.
