Ask a Planner

By Jason Heath, CFP on August 11, 2025
Estimated reading time: 6 minutes

By Jason Heath, CFP on August 11, 2025
Estimated reading time: 6 minutes

A MoneySense reader wants to sell stocks and buy ETFs but has concerns about the tax implications. Here’s what to keep in mind.

I have a mixed bag of stocks in my TFSA, RRSP, corporate trading account, and in my non-registered accounts.

I am in my mid-50s and looking to simplify my portfolio. I would like to sell all positions within each account and deploy a 2 to 3 ETF portfolio. Am I able to sell off everything to purchase VEQT and a bond ETF, or will I be penalized (taxed) on the approximately $1 million in stocks?

–Brad

Some investors buy only stocks, others buy only exchange-traded funds (ETFs), and yet others use a combination of the two. Both can be a viable way to build a portfolio. Let’s look at each one, starting with stocks—specifically, the tax implications of selling stocks in tax-preferred versus non-taxable accounts.

When you sell stocks in a tax-free savings account (TFSA), there are no tax implications, Brad. There is no tax to sell a stock for a profit, nor tax savings to sell a stock for a loss.

There is no tax to withdraw from a TFSA, either. The only tax that may apply within a TFSA is withholding tax on non-Canadian dividends earned, ranging from 15% to 25%. This withholding tax happens at the source, either before the dividends are earned by a mutual fund or an ETF, or, for a stock, by the brokerage before the dividend is credited to your account.

U.S. withholding tax does not apply to U.S. dividends earned directly in a registered retirement savings plan (RRSP), registered retirement income fund (RRIF), or other similar retirement accounts. The “earned directly” reference means that the U.S. stocks are........

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