Transfers out of a Margin account
Published: Oct 17, 2022
Updated: Nov 27, 2023
Learn how to transfer cash and explore the potential tax implications of transferring investments out of your Margin account.
Since margin accounts are considered non-registered, certain types of transfers out of these accounts may trigger taxable events.
Transferring cash out of a Margin account
Although transfers of cash out of a margin account are not taxable themselves, if you sold an investment and ‘realized’ or locked-in your profit, this action of realizing the profit is taxed as a capital gain when it’s time to file your taxes.
Therefore it’s not the transfer of cash out of a margin account that ‘triggers’ the taxes, but rather when you bought/sold the investments and at what prices.
You can request a transfer of either Canadian or U.S. Dollar cash out of your margin account at any time, provided that this does not drop your buying power to a negative balance.
This is only a concern if you’re borrowing funds to trade with, and may result in a margin call if your buying power is below $0.
Transferring investments out of a Margin account
When you transfer any type of investment out of a Margin account, (excluding Margin to Margin) this is considered ‘realizing’ your gain or loss in the eyes of the CRA.
If you bought shares at $10 for example, and they’re now worth $15 each, if you transfer these into a registered account for example, this is treated the same way as if you had sold the shares for taxation purposes.
Please keep these tax implications in mind if you choose to transfer any investments out of your margin account, we also recommend speaking with a tax professional if you have any additional questions.
When you transfer investments out of a margin account, the dollar amount of the transfer is represented by the market value of the investment on the date of the transfer request. Therefore the amount of capital gain/loss is dependent on this market value.
You have a few different options as to which price is considered the “market value” depending on the type of investment:
Type of investment | Available prices |
|---|---|
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.
Please note: Depending on the receiving account type, there may be additional tax implications to be aware of (i.e. TFSA contribution limits).
Explore the related articles in this lesson for more information on asset transfers.
