De-registration of lump sum withdrawals from an RRSP and withdrawals from a RRIF in excess of the calculated annual minimum amount are subject to tax with-holding at source according to the following scale:

 under $5,000  10%
 $5000-$15,000  20%
 over $15,000  30%

Remember that this with-holding rate scale does not determine the final amount of tax you will pay on the withdrawal. That is determined ultimately when you file your tax return for the year. The rate scale only determines how much is with-held up-front.

Planning considerations

    • When a large withdrawal is required to fund urgent cash needs, sometimes it is wise to minimize the with-holding tax at source by, for instance, withdrawing $5,000 twice rather than $10,000 once. Remember that you are only buying time with this strategy, as ultimately the correct amount of tax will be determined when you file your return, at which time you may owe more. Also, we aware that your plan holder may charge a fee for these withdrawals.