Question of the Week: Can I open a TFSA for my child?

Submitted by nsscadmin on Wed, 12/02/2020 - 11:19

In a previous blog post we addressed the age limitations for opening certain registered accounts. As stated in that post, to open a tax-free savings account (TFSA) you must be the age of majority, which allows you to legally sign a contract. In Nova Scotia that is 19 years of age. Until your child turns 19 they cannot open a TFSA and you as their parent or guardian are not able to open one for them.

There may be other ways to invest and save for your child before they turn the age of majority. Many financial institutions will allow you to open a trust account for your child where you can invest in stocks, bonds or other securities on their behalf.

There are many kinds of trust accounts. If you are thinking of opening one for your child make sure you fully understand the requirements, how the account works and any tax implications that come with it. You may want to discuss these tax implications with a tax professional. You should also ensure you understand how the beneficiary relationship with the account works to make sure it fits your financial goals for the account.

Failure to file annual financial statements.
Failure to file interim financial statements.
Failure to file an annual or interim management’s discussion and analysis (MD&A) or an annual or interim management report of fund performance (MRFP).
Failure to file an Annual Information Form (AIF).
Failure to file a certification of annual or interim filings required by Multilateral Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (MI 52-109).
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Failure to file a business acquisition report.
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Failure to file a mandatory news release.
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Failure to include disclosure in an issuer’s MD&A relating to disclosure controls and procedures and their direct effectiveness that is referred to in a certificate filed under MI 52-109.
Financial statements of the reporting issuer, or the auditors’ report accompanying the financial statements, do not comply with the requirements of NI 51-102 Continuous Disclosure Obligations (NI 51-102), National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106) or National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency (NI 52-107).
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The reporting issuer’s AIF, MD&A, MRFP, information circular, or business acquisition reports do not contain information for each of the content items required by NI 51-102 or NI 81-106.
The reporting issuer’s technical disclosure or other reports do not comply with the disclosure requirements of NI 43-101 or 51-101.
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