When moving funds between accounts, in most cases we move the value of holding as is. Let’s use an example where you're looking to move $500.00 from your Personal to your TFSA. When you submit a request, we try to find $500.00 of a holding (that you’re also holding in your TFSA) in your Personal and move it to your TFSA.
If your investments have increased in value over time or from currency conversion, you may trigger realized gains (also called capital gains) when moving your funds. A capital gain is calculated as the difference between the value of the asset on the date of transfer, less the value of the asset on the date of purchase. So if your $500 investment is now worth $750, when we transfer this from your Personal to your TFSA, $250 will be recognized as a capital gain, of which 50% ($125) is included in your taxable income when you file your tax return. This only happens for taxable accounts (Personal, Joints, and Corporates), so your non-taxable accounts like TFSAs or RRSPs are exempt from realizing gains. When moving funds, we always try to find the best holding to move your funds to reduce your tax impact.