Yes, you can own a TFSA when you are a non-resident of Canada.  Although you do not earn new TFSA room while you are a non-resident, the previously earned room does not disappear.

You cannot however contribute to that TFSA while you are not a Canadian resident.  If you do, expect to pay a penalty of 1% per month on the full amount of the contribution until you have withdrawn the overpayment.  A partial withdrawal will not reduce the tax calculation.

If you return to Canada, or repay the over-contribution, no further penalty will be assessed.  The penalty is not levied on the month you make the repayment – so be sure to make the repayment at the end of the month rather than the beginning of the next month.

You need to fill out an RC423 – TFSA Return, along with a Schedule B – Non-resident contributions to a TFSA.  The return is required to be filed by July 1 of the next calendar year.

It is not a good idea to assume that “what they don’t know, won’t hurt them”.  Because there are, of course, penalties for late or non-filing of the return that will increase the amount you owe to the CRA.

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